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The Shouting Match Between Sec. Gary Teves And Resigned BIR Chief Sixto Esquivias IV

November 3, 2009


Don’t look now but alarm bells are sounding over the abrupt resignation of Bureau of Internal Revenue chief Sixto Esquivias IV in the wake of what wagging tngous described as a “shouting match” with his boss, Finance Secretary Gary Teves.

The humble Mr. Esquivias is trying to avoid washing washing dirty linen in public but insaiders in the tax agency are saying his tiff with Sec. Teves erupted over the move to detach the BIR’s Large Taxpayers Service (LTS) and put it directly under the control of Mr. Narciso Santiago Jr.

Santiago, a known cockfighting aficionado, is the husband of voluble Sen. Miriam Defensor  and occupies the quite nebulous post of presidential assistant on revenue generation.

Senator Miriam is running for re-election next year as a guest candidate in the ticket of come-backing former president Joseph ‘Erap Estrada.

The suspicions are that the LTS which has authority to forge compromise deals with delinquent large taxpayers (those with tx payables of PhP 1-M and up) could be used for under the table political fund-raising activities.

Here’s how a story about the troubles at the BIR went:

MANILA, OCTOBER 5, 2009 (MALAYA) BY DENNIS GADIL – What’s in the Large Taxpayers Service (LTS) unit of the Bureau of Internal Revenue (BIR) that drives Miriam Defensor Santiago hell-bent in having it transferred under the supervision of her husband Narciso Santiago Jr., presidential adviser on revenue enhancement (PARE).
Sen. Santiago, chair of the Senate economics chair and Senate finance sub-chair, was fuming mad last week at Internal Revenue Commissioner Sixto Esquivias IV for refusing to turn over the LTS to her husband.
The LTS monitors and analyzes the tax payments of the Top 1,000 corporations and persons with a net worth of P300 million who pay an annual income tax of at least P1 million.
The LTS accounts for more than half of the BIR’s annual collection. This year, it is assigned 60 percent of the assigned goal of P798.5 billion.
At the budget hearing of the BIR, the woman senator said Esquivias has been ignoring Administrative Order 236 issued six months ago by President Arroyo which provides for the transfer of the LTS.
“What is your problem Mr. BIR Commissioner? What is your interest in the large taxpayers unit?” Sen. Santiago shouted at Esquivias.
Sen. Santiago said that in her presence, Arroyo reminded Esquivias to turn over the LTS to her husband during the President’s last visit to New York.
The senator recalled that Esquivias was overheard telling the President that Narciso as PARE should concentrate on companies and persons not covered by the LTS.
She said Esquivias also threatened to resign if the f the LTS was taken away from him.
“How dare you talk back to President that way? You know that the President has the absolute authority and control over this,” Santiago said.
The senator hinted that the BIR chief was refusing to turn over the LTS because he was going to use it for his fund-raising campaign in next year’s elections.
“You’re so possessive of the large taxpayers unit. Are you going to use it for your campaign?” Santiago asked.
“No, I’m not running for public office,” Esquivias said.
Santiago herself has declared she will seek re-election in May.
The BIR chief said he did not immediately implement AO 236 because he felt that “giving away” the LTS would be tantamount to abdicating his duties.
He, nevertheless, said he was in the process of making the turnover after recently receiving the go-ahead signal from Finance Secretary Margarito Teves.
Santiago said the turnover would just be an “internal procedure” and, thus, would not violate the mandate of Esquivias’ office.
She said the BIR should be abolished, saying it should be renamed as the “Bureau of Unexplained Wealth” because of many cases filed against revenue personnel who have allegedly amassed questionable wealth.
During the budget hearing, Esquivias was sandwiched between Teves and Customs Commissioner Napoleon Morales, who both appeared unsympathetic to the former’s travails.
Esquivias, at the end of Santiago’s outburst, promised to make the turnover “right away.”
Sought for comment after the hearing, Esquivias said he was “depressed” as he has not been so embarrassed in his entire life.
Narciso, an Estrada administration interior undersecretary, was named PARE by Arroyo in 2004 but took office only in 2005. He was given the vague general mandate of helping the government’s two top revenue generators, the BIR and the Bureau of Customs, improve their collections.
In May this year, the President issued AO 236 expanding the PARE’s powers by authorizing him to run after suspected big-time tax evaders which are under the LTS.
“With the concurrence of the Secretary of Finance, he may initiate the filing of appropriate action, if warranted, against persons liable for the violation of pertinent laws, rules and regulations in relation to the Large Taxpayers Units,” the AO said.
Narciso’s office was given a P10 million budget.
BIR insiders regarded Narciso’s appointment as redundant and was meant to undermine Esquivias, who was said at that time to be on the verge of being sacked for failing to meet revenue targets.
In defending the order, Executive Secretary Eduardo Ermita earlier said AO 263 should be taken “positively” since it is simply aimed at aiding the BIR in running after erring taxpayers.
“It’s not that the presidential adviser on revenue enhancement has taken over the job of BIR. Precisely, that is the very purpose of his job, for enhancement of revenue collection. The PARE has direct contact with the President, and that will somehow show that there’s an effort for us to collect the taxes,” Ermita said.
The BIR has created six groups to monitor major industries covered by the LTS: manufacturing, banking and other financial intermediaries, insurance, real estate and trading, utilities and transportation, and other services.
Last August, Sen. Santiago said in her Senate Resolution 1266 that her economics committee would hold public hearings on alleged anomalies in the collection of taxes by the LTS unit.
Santiago said she would summon the top 20 large taxpayers to a hearing to shed light on charges of inefficiency and corruption in the LTS.

tax montage

The tired phrase is only two things in life are certain, death and taxes.
But no one deserves to be screwed while already paying his taxes, right?

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