Teves, Hefti at loggerheads over reduced BIR Q1 target

04/29/2008

Finance Secretary Margarito Teves has questioned the Bureau of Internal Revenue’s (BIR) unauthorized reduction of tax targets fearing that this could jeopardize the national government’s goal of balanced budget this year.

In a command conference at the BIR office in Quezon City last week, Teves questioned BIR Commissioner Lilian Hefti on her decision to reduce by five percent the BIR’s targets for the first semester of 2008.

Teves expressed surprise upon learning that the Department of Finance’s (DoF) 49.4-percent tax goal for the BIR to collect from January to June was reduced by Hefti to only 44 percent, without informing the finance chief.

According to the lady commissioner, the new revenue measures she has recently imposed will start to take effect only in the latter part of the year, claiming that the revenue collection will catch up by the second semester.

Teves, however, retorted that revenues are at its peak during the April tax season, when individuals and corporations file their taxes, and not during the second half of the year.

In its race to balance the national budget this year, the inter-agency Development Budget Coordinating Council (DBCC) has set the BIR’s full year goal at P844.95 billion, or at least a P70.41-billion monthly collection.

The DoF’s original 49.4-percent target accounts for P417,405 billion of the annual DBCC goal of an average of P69.57 billion for the first six months of the year. But Hefti’s 44-percent target will only amount to P371,778 billion or a P61,963-billion monthly target for the same period.

So under Hefti’s 44-percent target, the BIR will then need to collect P78,862 billion monthly from July to December to catch up with the annual DBCC goal of P844.95 billion, which is an impossibility, according to Teves.

Also, if the 44 percent mid-year target will be followed, the BIR should be able to collect P205,156 billion in the second quarter of 2008 or P68.38 billion for the April-May-June period after the agency collected P166.662 billion in the first quarter of 2008.

Last month, the two officials had a similar altercation on some policy difference during their March Command Conference, particularly on Hefti’s issuances of revenue circulars without prior approval of the finance chief.

Teves also questioned Hefti’s continued refusal to install Celia King, whom President Arroyo appointed to the top post in February, as Deputy Commissioner for Resource Management Group.

For the first quarter, the BIR only collected P56.7 billion for January, P50.9 billion for February, and P55.4 billion for March. Last year, the agency missed its P765-billion goal by P53.7 billion, collecting only P712.09 billion

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