Unified revenue collection agency premature — tax research center
By Alexis Douglas B. Romero, BusinessWorld | 06/26/2009 1:08 AM
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MANILA - The National Tax Research Center (NTRC), a research body attached to the Finance department, has expressed apprehensions over a bill seeking to establish an integrated revenue body that will replace the existing collection agencies, saying this may be premature if the state lacks the technology and infrastructure to link its offices.
House Bill No. 6007, filed by Camarines Norte Rep. Liwayway Vinzons-Chato, removes from the Bureau of Internal Revenue (BIR) and the Bureau of Customs (BoC) their revenue collection function and transfers it to a new body, called Philippine Revenue Authority (PRA).
Under the bill, the PRA will integrate the revenue collection functions of BIR and BoC and will execute the tax policies drawn by the Finance department. The BIR will then be abolished while the BoC will be renamed as Philippine Border Services Agency to reflect the change in its functions.
In her bill’s explanatory note, Ms. Chato said a single revenue authority would pave way for well-coordinated, coherent policies and should promote efficiency among revenue personnel.
The PRA will have a Revenue Board that will be authorized to make policy decisions and to select their commissioner. Ms. Chato has said the collegial body would help prevent corruption and would make it easier for the government to boot out non performing officials.
The bill also requires the PRA to set up training institutes or enter into agreements with educational institutions to establish training programs on taxation, tariff and customs, and tax administration for its personnel.
But in a 12-page position paper, dated June 23, NTRC Executive Director Lina D. Isorena cited the need for the government to enhance the capabilities of the country’s tax administration before such merger would be implemented.
"The benefits of a merger are only magnified when technical and institutional capacity of tax administration are in place. The effectiveness of an integrated set-up of custom and tax administration depends on various factors, among which is the overall administrative infrastructure of a country," she said. "The computerization and interconnection of systems between the two agencies [BIR and BoC] essentially enhance tax compliance and improve tax administration...Thus integration, as it is, does not absolutely guarantee efficiency and effectiveness...Thus, the plan for a merger may be premature at this stage."
The NTRC chief noted that the BoC is still modernizing its administration to make it at par with international standards and that risk management tools as well as some technological upgrades have yet to be fully in place.
"The purpose of the merger might as well be realized just by interconnecting the systems of BIR and the BoC. A closer working group to complement each other’s work may be more inexpensive, less problematic, and more socially acceptable than a plan for merger," Ms. Isorena said.
She also warned that the transition to a unified body might cause disruptions that can affect the government’s revenue generation efforts. "The government cannot afford this situation at this time when the country’s coffers is facing pressure to pump-prime the economy," Ms. Isorena said.
The NTRC head, however, agrees that in principle, a single revenue body could enhance efficiency and improve customer service since this would lead to consolidation of taxpayer data.
"The merger will be some sort of a ‘one-stop shop,’ especially for firms, since the BIR and BoC would share the same clientele," Ms. Isorena said.
"If ever, any merger of the two revenue departments must be carefully planned and done by stages in order to minimize the adverse impacts on taxpayers and on other aspects of the departments’ work programs and provide sufficient time to equip the personnel the know-how in administering BIR-Customs functions."
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