IN AN attempt to exonerate some of the Bureau of Internal Revenue employees of rampant corruption, BIR Employees Association President Percival Salazar has argued several points that gave rise to more questions instead of clearing issues on the prevalence of corruption within the BIR.

One of his assertions was that corruption within the BIR is limited to a few employees. Salazar argued that those suffering from the obvious lack of awareness of the collection processes are spreading incredible tales of grand corruption within the bureau.

His second assertion was that the key to increased collections is increased tax investigations. Salazar criticized past management for suspending tax investigations and attributed the shortfall in revenue collection to this policy.

Where there is smoke, there is fire
Numerous reports have established the existence of corruption within the BIR. The business community and even ordinary citizens perceive the BIR as one of the most corrupt, if not the most corrupt, government agencies. They have documented their harrowing experiences in dealing with tax examiners and tax auditors from the BIR.

A Social Weather Station (SWS) poll conducted in 2001 showed that 57 percent of 506 private enterprises perceived the BIR as the most corrupt agency. The Office of the Ombudsman has annually reported the tax collecting agency as one of the most corrupt agencies in the government.

Investigative reports further elaborate the extent of corruption within the BIR. There are documented accounts, coming from revenue district officers and bureau insiders themselves, of the prevalence of corruption.

A recent study by the Transparency International (Philippines) shows that only P1,000 for every P2,000 remits back to government coffers, while P500 goes to corruption and collusion and the rest to "loopholes" in collection.

Corruption within the BIR is hard to deny, but its extent and prevalence remains unquantified. The same is true with other forms of government corruption.

Given this nature of public sector corruption, it is incorrect to account the number of BIR employees committing corruption. Either the minority or the majority can commit corruption. But if corruption is rampant, if employees receive kickbacks and bribes by the millions on a regular basis, it is immaterial and irrelevant whether there is one or one thousand people committing corruption. The bottom line is that the government continues to lose huge amounts of money, while bureaucrats unjustly enrich themselves.

Double-edged Weapon
Another assertion was the previous management decision to suspend tax investigation and its alleged role in the revenue shortfall. But while investigations might be used constructively to raise collections, they could also be used destructively to harass taxpayers. There are instances when regulatory instruments such as tax investigations have been used extensively to extract rents from the private sector. In a Philippine Center for Investigative Journalism report, BIR insiders confirmed that tax audits and investigations provide one of the most lucrative opportunities for corruption in the bureau, and have become tools for harassment by BIR personnel.

Moreover, tax examiners are given wide discretion in conducting their investigations. Businessmen complain that examiners arbitrarily forbid certain expenses from being deducted from the taxable income. Worst, there is no monitoring done to check the abuses, either because of plain neglect or because some BIR officials are accomplices to the abuse.

Salazar argued, "Experience shows that tax investigation is the very key that paves the way for high voluntary tax payment compliance." The assertion is a non sequitur, because if the BIR has been conducting tax investigations before it was suspended, how is it possible that the government experiences collection shortfalls even before the suspension of the investigations?

We can further cite instances of corruption, abuse, discretion, and neglect in the affairs of the BIR. It is unfortunate that limitation in space hinders us to mention other cases. What is evident, though, is that the culture of corruption is deeply ingrained in its system.