Small price for unpopularity
The Bureau of Internal Revenue strictly enforced last Monday’s deadline for filing individual income tax returns.
Unlike last year, Revenue Commissioner Kim Henares did not extend the work hours of BIR offices to accommodate taxpayers who wait for the last day to comply with their tax obligations.
In a radio interview, she said it was time taxpayers got over their mañana habit and discipline themselves into filing their ITRs ahead of April 15.
As expected, some taxpayers grumbled over the strict enforcement of the cutoff date and complained about her “insensitivity” to the plight of taxpayers with busy schedules.
These complaints are par for the course in the BIR’s campaign to meet its collection target this year which represents about 80 percent of the country’s expected revenue intake.
In this drive, Henares once locked horns with Senate President Juan Ponce Enrile (who claims to be a tax expert) on the interpretation of certain tax laws and came out unscathed. The lady is no pushover on tax issues.
Understandably, she is a pain in the neck of tax cheats within the ranks of accountants, lawyers, medical practitioners, professional basketball players, movie personalities and other people who think they are exempt from the obligation to pay the right taxes.
Expertise
There is truth to the Inquirer’s recent special report that Henares is “unpopular with businessmen, including bankers, company presidents and even the auditing and accounting communities.”
They have been heard to complain (although in silence) “about her ‘aggressive’ tax policies, often enforced with little consultation with them.”
Henares’ failure to win the “Miss Congeniality” award from taxpayers and her peers validates the adage that “a popular auditor is one who does not perform his work properly.”
From biblical times, tax collectors have not been viable candidates in popularity contests. More so if they are efficient or aggressive.
Having cut her teeth in the auditing field, and aided by her training as a lawyer, Henares knows how and where business people, lawyers and accountants hide the skeletons in their financial statements. What is this they say that it takes a thief to catch a thief?
In addition to this background, she has in her favor the solid support of her immediate boss, Finance Secretary Cesar Purisima, who is reputed to be one of President Aquino’s fair-haired boys.
Henares must have stepped on a lot of toes in her collection efforts since her appointment last year. When a vacancy arose in the Supreme Court, some business personalities silently campaigned for her “promotion” to the tribunal.
Nice try, but the president appointed somebody else to the position.
Enforcement
With Purisima watching her back, Henares has come up with novel ways to increase tax collection from sectors that have traditionally been treated like sacred cows.
In 2011, stockbrokers raised a howl when she announced that transactions of shares of listed companies that fail to maintain a certain public float (or the percentage of the company’s stocks that should be owned by public investors) shall no longer enjoy preferential tax rates, but instead will be imposed the higher capital gains tax.
The stockbrokers threatened to go to court to question the validity of her action. She did not backtrack and Purisima refused to countermand her order. Sensing the futility of further resistance and aware of her resolve to enforce that order, the stock exchange and affected companies opted to comply with the requirement.
Lately, Henares has put under scrutiny a banking transaction that for years has been able to avoid the payment of taxes by cleverly tweaking the manner by which its returns are computed and paid.
Wary about the possible adverse effects of her plan on their bottom line, some bankers have (under the cover of anonymity, as usual) expressed their intention to sue her in case she gets serious with her collection effort.
Accreditation
If you think Purisima and Henares may be inclined to be liberal with their fellow accountants in the exercise of their profession, perish the thought.
In 2011, a group of accountants (some of whom worked with Purisima at his former accounting firm, SGV) met with him to request the easing of the BIR’s requirement on the number of copies of audited financial statements that should be filed with the BIR and Securities and Exchange Commission.
Citing additional costs and workload, they asked that duplicate, rather than original, copies of the statements be accepted for filing.
An accountant present in the meeting recounted that, although the discussion was cordial, Purisima did not budge an inch, much less agree to a compromise, and insisted they comply with the BIR’s directive.
Several weeks later, the SEC, which is under Purisima’s administrative supervision, tightened the rules on accreditation of accountants and ordered the regular rotation of auditing firms in listed companies to minimize undue fraternization among them.
Considering the harmonious working relationship between Purisima and Henares (akin to Batman and Robin as some irreverent accountants describe it), and with the administration pushing for more revenues to fund its infrastructure programs, the business community and high net worth individual taxpayers should brace themselves for more aggressive tax collection efforts.
As long as the revenues keep coming, unpopularity is a small price Henares has to pay for doing her job.
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