As lawyer-accountant Sixto Esquivias IV prepares to assume his new post as tax bureau chief in two weeks, critics and those who previously dealt with him question how he would deliver the government's much-needed tax collections.

Esquivias, 52, rose from the ranks at the Bureau of Internal Revenue (BIR) during his 23-year stint that ended in 2000. He will replace Lilian Hefti who herself climbed the ladder after long years of service at the BIR.

Esquivias' critics said that during his stint as deputy commissioner for the legal enforcement group, he made compromises on some rulings to favor several parties with tax cases. No details were provided by sources who are familiar with Esquivias' work at the BIR.

Among the bureau personnel, Esquivias' reputation has also reportedly made them apprehensive after they learned who their new boss will be.

On the other hand, some are unsure how Esquivias will immediately adapt to the tax administration tasks since the bureau has drastically changed since he left. For example, there was no Large Taxpayers Services yet during his time. The Large Taxpayers Services group concentrates on entities that pay the biggest aggregate taxes, a role that used to be dispersed among the various regional offices.

The incoming tax chief taught taxation at the University of the Philippines.

Vacant post

Esquivias's appointment reportedly had the backing of Senator Juan Ponce Enrile and former senator, now Socio-economic Planning Secretary Ralph Recto. Esquivias provided consultancy services to the two on tax reform laws after leaving the bureau.

The BIR top post was vacated when Hefti resigned after failing to meet tax collection targets, which was exacerbated by reported tiffs with Finance Secretary Margarito Teves.

Teves reportedly learned that during the gruelling proceedings at his confirmation hearings, it was Hefti who provided Enrile some documents regarding the contentious tax re-classification request of locally-made Pall Mall cigarettes.

Enrile had questioned Teves' circumvention of a BIR ruling that kept Pall Mall brands under its original tax classification. Teves agreed to Pall Mall's request for a re-classification that would have reduced excise tax on the cigarettes to P6.74 per pack from the original P26 after the British firm decided to manufacture these locally. Enrile charged Teves for causing the government to lose hundreds of millions of pesos in foregone revenue.

Teves eventually caved in and supported the higher tax classification for Pall Mall products.

The tiff between Teves and Hefti, however, came to head after the latter failed to meet tax collection targets for August and September. Hefti reportedly requested to reduce the bureau's target for 2008, but Teves shot it down.

Meeting targets

The government is hard-pressed to meet its fiscal promises, which include keeping the budget deficit at P75 billion this year, after it increased social services spending to help cushion the poor from the impact of several months of record high food and fuel prices.

Meeting the 2008 revenue targets is crucial in the Arroyo government's resolve to keep its promise that its finances are in check, even as concerns over high food and fuel prices are overtaken by the imminent impact of the US-led financial crisis, which is slowly being felt in the Philippines' real economy.

Tax collections account for about two-thirds of government's total revenues.

In the end, Esquivias will be evaluated by his ability to lead a bureaucracy tasked to collect taxes that should reach the P845 billion target this year.

In his interviews, Esquivias said he will focus on going after tax evaders and will implement programs that will benefit the small taxpayers.

Teves said “I liked that he really was concerned about issues like customer service. He wanted to pursue a set of procedures that would allow simplification in the way we would pay taxes."

Teves also said he is banking on Esquivias' past work experience at the bureau. "I would imagine he has familiarity with the BIR operations and people related to the organization.”