Why the slow justice system spells interim doom for BIR tax cases

The Bureau of Internal Revenue has consistently become unpopular in the past few years, particularly when it comes to tax payers involving famous people like boxing champ Manny Pacquiao, former Chief Justice Renato Corona, and even model-actress Solenn Heussaff. 

 

These names have been involved in news on tax fraud. But that's exactly what the BIR's Run After Tax Evaders program is all about: getting the news out to "generate the maximum deterrent effect" on taxpayers, even if it meant filing tax evasion cases with the Department of Justice.

 

Designed to investigate suspected violators of the National Internal Revenue Code of 1997, the RATE program is complemented by the equally controversial "scare and shame campaign" which involve newspaper ads against tax cheats. 

 

Doctors, accountants, online sellers were the first to express disgust over the so-called gimmick, as they were the very subject of the ads. 

 

The RATE program was the brainchild of the Arroyo administration in 2005. But it was the Aquino administration that gave RATE a much needed boost. 

 

The BIR targets to collect P1.674 trillion in revenues this year.
 

 

Reaping rewards

 

Not long after the Aquino-leg of the RATE Program, the BIR began reaping the rewards. Income tax collections from professionals and the self-employed rose to P10.19 billion in 2011, 37.8 percent higher than in 2010, BIR Commissioner Kim Henares has pointed out. 

 

The BIR under Henares has so far filed 344 tax evasion cases over the last five years or almost 70 cases per year on average. 

 

The number of cases saw a steady increase each year since Henares took the helm of the BIR in 2010, from 23 cases that year to 123 cases last year. 

 

Seventeen complaints have so far been filed in the first quarter of 2015. According to the BIR, the number exceeds the bureau's annual target of 36 cases annually in 2012 to 2014.

 

If the campaign is effective, shouldn't the number of cases reflect a matching decline? 

 

Maybe later on but not at this point, according to the BIR, noting the bureau is still in "intensified" mode in pursuing tax cheats and trying to "broaden" the campaign to include more cases in the countryside.

 

"Kaya tumataas pa lang this time. Intense ang pag-pursigi namin until 2016," BIR OIC-Assistant Commissioner Claro B. Ortiz said in an interview with GMA News Online.

Filing cases

 

Apart from targeting famous people, there is a noticeable speed in filing cases against tax evaders.

 

A few months after making the headlines in April 2013, Janet Lim-Napoles – alleged mastermind in the P10-billion pork barrel fund scam – and her husband were sued by the BIR for supposedly evading up to P61 million of taxes.

 

Several months later, Cedric Lee showed up on the BIR's radar after the businessman got involved in the January 2014 mauling of actor-TV host Vhong Navaro. The bureau then sued the businessman, his company and others for supposedly not paying taxes to the tune of P194.47 million.

 

Businessman Antonio Tiu was slapped with a tax complaint last January, just months after having been tagged in a Senate hearing as an alleged dummy of Vice President Jejomar Binay.

 

The BIR admits the timing of the case filings is far from coincidence.

 

"Strike the iron while it is hot. Since mainit ang issue, ito ang aming mga priority," said Ortiz.
 

 

One conviction

 

Despite the 344 cases, only a little over 11 percent or 39 cases have actually been elevated to the courts. It usually takes more than a year for a complaint to get past the DOJ, and long still during the trial proper.

 

The BIR filed a tax evasion complaint against the former Chief Justice Corona in August 2012, just three months after he was ousted. It took the DOJ nine months to resolve the complaint, and 10 more months to file a case before the Court of Tax Appeals.

 

The tax complaint against the Napoleses took two and a half years before it was elevated to the CTA just last March.

 

"Mabagal talaga ang justice system sa atin. Mahaba ang proseso at mayroon talagang process ng appeal," Ortiz lamented.

 

Over the last five years not a single tax case has actually resulted in a conviction.

 

The one conviction in 2012 involves a case filed in 2005. 

 

It seems that under the present system, no matter how many cases the BIR churns out, the complaints are doomed to get stuck in the bottleneck at the prosecution and trial stages.

 

Apart from budget constraints, the DOJ and the courts also lack the manpower to process complaints as swiftly as possible, a situation that contributes to case-congestion. – VS, GMA News