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Action for Economic Reforms

MANAGING BIR

The author is the senior policy analyst and a member of the Management Collective of Action for Economic Reforms.


Some quarters argue that the Bureau of Internal Revenue (BIR)

Commissioner lacks the necessary instruments to discipline erring and

inefficient personnel, thus the urgent need to restructure the agency.


But the notion that the BIR Commissioner is helpless against

incompetent subordinates is baseless. There are two principal

management functions available to the government that should allow for

the effective running of the BIR – the power of control and

supervision, and the power of administrative discipline.


Power of supervision and control. Generally, the executive body is

organized along a hierarchical structure from the president, the head

of departments, the bureaus down to its smallest unit. One key

management power is the power of supervision and control over

subordinate offices or personnel. This power is conferred generally by

the Administrative Code of 1997, and specifically by special laws

covering certain agencies.


This power of supervision and control is enormous. It includes the

authority to act directly whenever a specific function is entrusted by

law or regulation to a subordinate; to direct the performance of duty;

to restrain the commission of acts; to review, approve, reverse, or

modify acts and decisions of subordinate officials or units; to

determine priorities in the execution of plans and programs; and to

prescribe standards, guidelines, plans and programs.


Related to this power is the authority of the BIR commissioner to

assign or reassign internal revenue officers and employees, as provided

in Sec. 17 of the National Internal Revenue Code (NIRC).

The extent of the power is definitely comparable to the management authority in private entities.


Administrative discipline. The power of supervision and control is not

a toothless one. It goes hand in hand with the authority to discipline

subordinates. The BIR Commissioner, as head of office, has the

jurisdiction to investigate and decide on matters involving

disciplinary action against officers and employees under their

jurisdiction (the investigation may be delegated to lower-rank

officers).


The Administrative Code provides a long list of grounds for

disciplinary action: dishonesty, oppression, neglect of duty,

misconduct, disgraceful and immoral conduct, being notoriously

undesirable, discourtesy in the course of official duties, inefficiency

and incompetence in the performance of official duties, and so on. The

penalties that may be imposed include removal, demotion, or suspension.


The employee may also be preventively suspended while investigation is

pending. The procedure may be summary in certain cases.


The disciplinary action may also be filed directly with the Civil

Service Commission. The Ombudsman likewise has concurrent

administrative jurisdiction in certain cases. An appeal process is

available.


It may be true that the requirement of a valid ground and due process

for disciplinary action, and the process of appeal, at times, can slow

down the process. This, however, is not unique to the public sector.


The private sector is also required under the Labor Code to observe due

process and establish a valid ground in the discipline or dismissal of

personnel. An appeal process is likewise available.


Criminal liability. In addition to being administratively liable, a

public officer or employee may also be criminally liable for acts in

connection with the performance of his functions. The NIRC (Title X,

Chapter III) provides a long list of criminal acts of officials, agents

or employees of the BIR. The penalty for any of the said acts is quite

stiff. It includes a fine not less than P50, 000 but not more than

P100, 000 and imprisonment of not less than 10 years but not more than

15 years, and the additional penalty of perpetual disqualification to

hold office, to vote, and to participate in any public election.


These powers and the provision for criminal liability, when combined

with the proper exercise of the Commissioner’s powers under Sections 5

(power to obtain information, to summon, examine, and take testimony of

persons) and 6 (power to make assessments and prescribe additional

requirements for tax administration and enforcement) of the NIRC,

provide the Commissioner with ample instruments to effectively run a

tax administration bureaucracy and to enlarge taxpayer compliance. The

recent move by BIR Commissioner Guillermo Parayno to reshuffle key

revenue officers and the launch of a tax mapping or tax compliance

verification drive are examples of fresh attempts at the effective use

of these powers.


Not enough to stem corruption. While the proper and creative exercise

of the vast powers of the commissioner is enough to improve tax

compliance and bureaucratic efficiency, they might not be enough to

stem corruption, particularly bribery. What must be emphasized is that

this is not just a problem of the bureaucracy; the other half of the

problem is a bribing private sector. In the face of the mutual selfish

gain for the tax officer and the taxpayer to engage in bribery,

stemming corruption will remain a big challenge whether in the present

or in any restructured revenue agency. It is a problem that will have

to be addressed not only at the level of the bureaucracy, but at the

level of the private sector as well.


Still, the BIR Commissioner should be decisive in addressing corruption

when opportunity presents itself. The recent investigative report of

the Philippine Center for Investigative Journalism that documents

evidence of unexplained wealth of certain BIR personnel is an

opportunity for decisive and determined action. The commissioner must

work with the office of the Ombudsman and the Solicitor-General to

investigate the unexplained wealth and to initiate the appropriate

remedies.

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