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Look at the big pitcher.

IN NO time at all, the often disreputable Bureau of Internal Revenue (BIR) picked up where it left off in its supposed crackdown against tax evaders.

BIR head Caesar Dulay, who was another dorm mate of our motorcycle-riding leader, Duterte Harley, already lifted the ban that he himself imposed on the wholesale audit of income taxes of businesses, rich individuals and professionals on the very first day of the Duterte administration.

That order actually elicited loud cheers among taxpayers who became rather vocal against what they called harassment by BIR personnel in the past six years.

Surprise! Last week Dulay ordered the revival of the BIR program called RATE, or Run After Tax Evaders, covering income tax returns of individual and corporate taxpayers in 2014 and prior years.

The BIR must have fallen in love with the RATE under the previous administration, purportedly to ensure that tax evaders would be caught and punished. Not a single tax evader of course ended up in jail.

The current BIR chief seemed to be copying the blueprint of Duterte Harley in his campaign against illegal drugs: sowing fear in the hearts of pushers and users.

Based on official figures, the additional taxes collected by the BIR as a result of its wholesale audit would only amount to about 3 percent of its total takes.

The BIR seemed to believe that, on their own, taxpayers would never really declare their tax obligations correctly. Thus, the RATE program was needed to 'enhance voluntary compliance.'

In short, the fear factor. Much like in the anti-drug campaign.

The BIR must be worried sick about missing its collection target for 2016 amounting to P2 trillion. It must resort again to the scare tactic called RATE.

Our new economic team also declared the next six years as the 'golden age of infrastructure,' even sounding us off with a total construction budget of P7 trillion. No wonder, the team was lately talking about a big economic picture that the country would be able to achieve through big tax reforms.

As part of its tax agenda, the Duterte administration also released some big talk about this one-time big tax amnesty program that would cover the next 25 years, and so all those big shots would better atone for their big tax sins in some big time way.

It's as if the Duterte administration would still be around in the next 25 years.

Anyway, the administration also lined up big income tax breaks, apparently because the high income taxes turned off investors.

The new administration would reduce the rates, thereby giving up some P170 billion a year in tax collections. To recover the amount, the administration lined up some overkill measures, allowing the BIR to collect some P450 billion more, which would be more than one and half times the actual cut in income taxes.

Guess who will pay for the bulk of it? For a freaking glass of income tax breaks, we would have to give the government pitchers upon pitchers of other taxes.

Private think tanks estimated only about 1.5 percent of the population, or just about 1.5 million individuals, earned enough to have comfortable lives, while the rest of us should really be, well, 'struggling.'

The administration wanted to raise the tax on fuel, almost doubling it from the current P5.56 to P10 per liter. The top 1.5 percent of the population (earning more than P120,000 a month) would not feel the increase at all, and the administration could raise the price of fuel to the stratosphere, and the rich could always afford it-no sweat.

Down here, however, the predicted P1 increase in bus fare as result of the fuel tax increase would mean no food on the table.

Still, nobody could yet say the extent of tax evasion among the rich despite the gang-rape-style audit via RATE.

Like in the gory and bloody drug campaign, the campaign against tax evasion seemed to be hitting only the small players.

Note that the recent worldwide scandal called 'Panama Papers,' for instance, did not create much of a stir here.

About 10 million confidential financial documents were leaked from the Panama-based law firm Mossack Fonseca, showing questionable deals of the rich worldwide. The list included various local companies and businessmen, including big names like Andrew L. Tan, chairman of the board of Alliance Global and owner of Megaworld, whose net worth Forbes magazine placed at $5.1 billion.

More than a year ago, by the way, an importer of luxury cars appeared on the BIR radar, setting off alarms and red flags. Some eagle-eyed BIR personnel spotted glaring discrepancies in its tax declarations, particularly the big difference between the 'suggested retail price' and the actual market price for some German-made cars.

The company, for instance, declared P4.9 million as the price of one model, but the BIR found out that it should be almost P20 million. For the BIR, it was prima facie evidence of tax fraud.

Were there big shots ever taken to task? Let us just say that the Batman and Robin tandem in the company were known to have close ties with our former leader Benigno Simeon, aka BS, together with former Finance Secretary Cesar Purisima and former BIR Commissioner Kim Henares.

There was even a name for the group of fat cats that reportedly brokered billion-peso deals: the Yellow Oligarchs Club.

In early 2013, six BIR officers signed an immediate motion to investigate the luxury car importer that, from what I gathered, the BIR chief kept under wraps.

Our contacts in BIR also noted top guys in the bureau were rather amused at the newfound gull of Batman and Robin, who eventually wormed their way into the inner circle of Duterte Harley.

Unknown to the duo was that they were known as among the biggest contributors to the campaign of another presidential candidate against Duterte Harley.

There, it only goes to show that, even if the cat tries to change its stripes, the circle of Duterte Harley can still see them coming a mile away.

Here comes the BIR.
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Publication:Philippines Daily Inquirer (Makati City, Philippines)
Date:Aug 29, 2016
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