Wednesday, June 15, 2005

BIR's Resolve

Can Parayno Pull This Off?
By Miriam Grace A. Go
Newsbreak Assistant Managing Editor
THERE'S no doubt that the Bureau of Internal Revenue (BIR) is making headway in its campaign to make people pay the correct taxes, in large part because the media have given it positive play. The public has generally understood the BIR's message: to tinker with one's income tax is to do so at one's peril.

So we asked BIR Commissioner Guillermo Parayno Jr. if he would dare run after friendly reporters when some of them turn out to have under-declared their incomes. He became visibly stiff, fell silent for a moment, and turned to the papers that piled up on his desk.

Was he insulted that his resolve was being questioned? Was he sizing up the NEWSBREAK staff, wondering if we wanted to be flattered? Finally, after several seconds, he looked us in the eye and asked, "Why would we give the media special treatment?"

We shared this anecdote with a businessman who had dealt with Parayno when the latter was still vice president and IT specialist of the Lina Group of Companies. "I don't think he was afraid that he would offend the reporters [that's why he fell silent]," he said. "He's just the type who is always deliberate. He's never spontaneous. He makes sure he's studied everything before he opens his mouth."

In fact, says the businessman, Parayno's thoughtful, purposeful, and methodical style should give assurance to the public that the aggressive collection and prosecution campaign of the BIR is not for show. Supporters and critics of the commissioner, inside and outside the BIR, share this opinion.

His reputation precedes him. Parayno has excellent academic and professional credentials. He did well at the Bureau of Customs (BOC) from 1992 to 1998, and has been making waves in the BIR since he assumed the post in 2002.

A 1970 graduate of the Philippine Military Academy (magna cum laude), Parayno has studied warfare, psychology, business administration, economic investigation, and computer programming. A senior business journalist who had covered him over the years once pointed out, "If you're a tax evader, won't you feel nervous about that [Parayno's background]?"

At the BOC, he was credited for implementing the reform programs of the International Monetary Fund, privatizing some functions of the bureau, and computerizing the entire system. The argument is that, if he was able to put the tax collecting but graft-prone BOC in order, he would be able to do the same at the BIR. And this time—unlike at the customs bureau where, he told NEWSBREAK three years ago, his "sustainability measure did not work as planned"—he wants to make sure the reforms will be sustained even if he's "no longer in the bureau."

The BIR can't afford to fail. The agency accounts for 70 percent of the government's annual collection. In 2003, Parayno's first full year at the BIR, the bureau collected P424.27 billion, or P260 million more than its target for that year. It was the first time, since 1997, that the BIR had exceeded its collection target. Last year, the BIR missed its P476.3-billion collection target, but only by 1.31 percent.

"From the looks of it, he means business. Taxpayers are now more aware of their tax obligations," said a recently retired revenue district officer (RDO) who declined to be named lest his positive views on Parayno be misconstrued as cozying up to his former boss.

An innovation that Parayno introduced is taxpayer registration, payment of taxes, and submission of complaints against tax evaders through mobile phones. Another is the use of software that makes it easier for the central office to find mismatches in the income declarations of big taxpayers.

The tougher task, of course, is how to change mindsets at the bureau. Parayno admits that tax executives tend to favor striking compromises with delinquent taxpayers just so they can collect. One long-time BIR employee reflected this mindset when he tried to illustrate the advantages of a compromise. "A one-peso collection is different from a P1 million collectible. You might have to spend P2 million to collect that."

Making Parayno's mission easier to achieve is the lateral attrition law, enacted early this year, which rewards employees of revenue agencies when they surpass their target collection and punish those that fall short. With the institutional reforms that he has introduced, it would be tough for corrupt RDOs to get back at Parayno, the ex-RDO said. He was referring to the experience of Parayno's predecessor, Rene BaƱez, who recorded revenue shortfalls after his reform program displaced a number of inefficient and allegedly corrupt RDOs.

Parayno tends to be a micro manager, according to those who have worked with him, and the commissioner himself sees this as a weakness. For a time, he was the one writing the BIR press releases and conceptualizing the posters for the tax campaign. He also admits: "I use up most of my time on problem solving, on systems and procedures. I tend to neglect the personal touch. I'm weak in administration [in that sense]."

But this single-mindedness is Parayno's asset, according to a consultant to local governments on tax collection and computerization. "You can be sure that when he focuses on something, he will get it done. I think he has already achieved his goal—that of scaring a small segment of the population to scare everybody else."

Parayno himself looks like he won't stop at anything. Before showing off his boxing prowess to the NEWSBREAK staff—a slam man is a fixture in his inner room at the BIR—he stressed: "Mayabang kami. We cannot accept defeat."

 

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