MANILA – The chief of the Philippine Bureau of Internal Revenue (BIR) announced his sudden resignation, citing health reasons, including stress, as well as his apparent failure to meet the agency’s tax collection target imposed by the government for 2009.
Commissioner Sixto Esquivias 4th, the BIR head, said he was quitting barely a year after he was appointed to that position by President Gloria Macapagal-Arroyo. A veteran who rose from the ranks at the BIR, he was also the fifth commissioner to head the agency since the President Arroyo took over Malacañang in 2001.
Malacañang, through Executive Secretary Eduardo Ermita, said the President has accepted the resignation of Esquivias and would announce his successor soonest.
Ermita also said that in resigning, Esquivias has admitted that he did not perform well, particularly in meeting the tax collection target equivalent to $16 billion imposed by the government for the whole of 2009.
From January to September this year, official records disclosed that the BIR collected more than $11 billion or $800 million short of the target for the nine-month period.
The BIR accounts for 75 percent of the revenues collected by the national government and as a result, its shortfall would widen the budget deficit, according to experts.
BIR officials and experts, however, pointed out it would be impossible for the agency to meet the total tax collection target for this year due to the massive destruction and damage inflicted by the recent back-back-back typhoons “Ondoy” (international codename Ketsana) and “Pepeng” (international codename Parma).
Experts agreed that the shortfall in BIR collection is also due to unabated graft and corruption and other anomalies. The BIR and the Bureau of Customs, which are both under the Department of Finance, are widely perceived to be the most corrupt government agencies, along with the Department of Public Works and Highways and the Department of Education.
But, at the same time, reliable sources disclosed that aside from health reasons, Esquivias was also pressured into resigning for strongly opposing the plan to turn over a major BIR office, called the Large Taxpayer’s Unit, to Narciso Santiago Junior, the presidential adviser on revenue enhancement.
Santiago is the husband of Senator Miriam Defensor-Santiago, one of the staunchest political allies and vocal defenders of the President.
The sources, who requested anonymity, noted that earlier this year, President Arroyo expanded the powers of Santiago’s office to include the investigation of the country’s largest taxpayers and initiate the filing of charges against them for violating the country’s tax laws.
However, the sources said the move was also opposed by the private sector, particularly the Tax Management Association of the Philippines, Financial Executives Institute of the Philippines, Philippine Chamber of Commerce and Industry and the Philippine Institute of Certified Public Accountants.
These groups warned the plan would expose large taxpayers to double investigation and that the power given to Santiago’s office would just be a “redundancy” that can disrupt a business enterprise’s operations and hurt its bottom line.
On November 3, 2008, Esquivias replaced Lilian Hefti who quit in October that same year also for health reasons.
A taxation lawyer and taxation professor at the state-owned University of the Philippines, Esquivias was with the BIR for 23 years until he resigned in 2000.
He rose from the ranks, starting as an examiner to his last position as the deputy commissioner of the agency.
Esquivias also served as consultant to Senate President Juan Ponce Enrile and Ralph Recto, the former socio-economic planning secretary, on various tax issues.
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