Philippine Gov't Zeroes in on Smugglers, Tax Delinquents

MANILA, July 5 Asia Pulse - In order to recover the estimated P53 billion (US$1.15 billion) shortfall in tax revenue for the first six months of 2007, the Philippine government will go after smugglers and tax delinquents evaders.

Finance Secretary Margarito Teves, in a press briefing at Philippine Presidential Palace Malacanang on Wednesday, said the projected shortfall for the period January to June this year is in relation to the tax revenue target of the Bureau of Internal Revenue (BIR) and the Bureau of Customs (BoC).

The BIR has an estimated shortfall of P40 billion in tax revenue for the first six months of the year, while the BoC has a shortfall of P13 biilion, he said.

Despite this, Teves said the government is maintaining its fiscal target for 2007.

"We didn't change the target. The targets remain at P730 billion for the Bureau of Internal Revenue and P228 billion for the Bureau of Customs," he said.

"The objective is to still live within the P63 billion deficit target (for 2007), and to attain our entire revenue target which consist of tax revenues and non-tax revenues," he added.

However, Teves stressed that despite the projected shortfall in tax revenue target, "we will not sacrifice government services such as in infrastructure and social services." He said both the BIR and the BoC have instituted several measures to improve its revenue performance.

BoC Commissioner Napoleon Morales said they have initiated action plan in order to hit the assigned target of P228 billion for the year.

Such plan involves updating the Commission's value data base which is based on international standard.

"As far as motor vehicles are concerned, we have already published book values of all motor vehicles," he said.

Morales said the BoC also has fully activated its post-entry audit of all its records not only of last year but three years back.

"We have already issued demand letters to concerned companies amounting to more than P1 billion additional revenue," he said.

The BoC is also fasttracking the auction of all forfeited cargoes.

"This would mean additional collection for the government," Morales said.

The Customs bureau also uses state-of-the-art x-ray machines in entry/exit ports of the country to effectively detect technical smuggling that includes misdeclaration, misclassification, under valuation and under quantity of cargoes, he said.

For her part, BIR officer-in-charge Lilian Hefti said they would address "the leakages that we found out happened in the past." "The first half of 2007 was admittedly full of challenges and the BIR must deal with many challenges throughout the year. So starting today, we have to think, rethink and look back for the events that transpired in the past and start to look forward for fresh opportunities and ideas to pursue our objectives and goals," she said.

In order to meet its target, Hefti said, the BIR is implementing programs such as industry profiling and benchmarking of taxpayer's data; information sharing and matching with third parties; stocktaking of inventory; surveillance of establishments; closure of establishments that did not register under the value-added tax (VAT) system; and run after tax evaders and tax delinquents, among others.

Teves said in his earlier meeting with President Gloria Macapagal Arroyo, "she reminded us that in our governance-related programs like going after tax evaders and smugglers, one very important component here is to try to convert these cases into prosecution and conviction." He said both the BIR and the BoC will now be more pro-active in relating with the Department of Justice (DoJ) and the Court of Tax Appeal to facilitate and expedite the conversion of these cases into prosecution and conviction.

The President also directed Teves to look very closely into the country's declining oil imports.

"We felt that the President is correct that it seems counter intuitive that at the time when the economy is growing, oil imports apparently, based on official records, are declining," Teves said.

"We must try to figure out how this is happening and perhaps, it's really in the area of the anti-smuggling acftivities where we have to zero in," he added.

With the successful efforts of the BoC and the BIR, Teves said, "we can get the cooperation of the citizens if we are able to convert some of these cases into actual prosecution and conviction."

(PNA)

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