BIR Propaganda FADing… its White

There is this universal truth that man can never be alike. They may have the same physical characteristics endowed to humans but they differ in emotion, values and character among so many others. The manifestation of these human elements delivered by their subconscious and erstwhile training will necessarily and likewise vary. On this premise, to project via graffiti and visual art that all doctors, cpa’s, lawyers or internet sellers are collectively a burden to teachers and the people at large is making the contrary assumptions that all of them are alike. Here lies the fallacy and falsity that would now turn the propaganda into black. It is akin to brushing the mind of Joseph Goebbel into the caricature to achieve a noble objective through a precarious means. What could only be achieved by such display of arrogance is to drive a wedge between people. The breeding of suspicion and prejudice and thus eroding trust crucial to client/ patient and professional relationship. It is indicative of the BIR’s weakness and inability to implement its mandate via the conventional methods by resorting to tricks that is reserved only to covert and black operators. It projects the lost of civility and the dominance of frustration. What happened when the BIR and the Bureau of Customs were labeled as corrupt agencies? It is improbable that all the personnel of these agencies are also corrupt, but generalization had caused demoralization and lost of self-esteem among those who are not. They unwittingly detached themselves from the agency which they belonged thereby weakening the potency of the organization. Cohesiveness is destroyed and cooperation and teamwork is affected. This scenario could turn into grand and national scale which is defeatist of the government’s effort to promote national unity. One may label the fingers as part of the hand, but no fingers are alike.

BIR, Abuse and Human Rights

Revenue Regulation 15-012 issued on December 3, 2012 prescribed the regulation on the accreditation of printers of invoices/ official receipts and other commercial receipts.

I could merely guess that the purpose of this regulation is for convenience, and a means to indirectly pass some of the work that the Bureau of Internal Revenue (BIR) is supposed to be doing themselves consequently to the printers. But what is disturbing and apparent is it collides with the constitutional guarantee of liberty. The freedom to make a choice may have been impeded by this regulation. Business owners may have been effectively coerced by this regulation by subjecting them to the limitations listed therein.

We have to remember that after compliance to certain requirements, business licenses were awarded to, and the corresponding fees were paid by these printers to participate in the commercial activity of printing. The possible exclusion of most of them from the accreditation would amount to canceling that privilege to do business without due process, a sole authority that appropriately inures to the issuing agency. On the other hand, if there is anyone who has the right to accredit these printers, it should be the business owners that seek for their services. The BIR may have no legal ascendancy to unilaterally select printers for the taxpayer to utilize plainly because it negates freedom of choice and enterprise, an act that could be "void ab initio", as being defiant of the present constitutional constraint especially if the subjects are natural persons.

Similarly, BIR Revenue Regulations 11-2006, 4-2010 and 14-2010 prescribes the guidelines for the accreditation of tax practitioners. This would in effect bar even CPA’s and Lawyers not accredited by the BIR from making representation for their clients unless they submit to the requirements for accreditation. Again the BIR may not only be selecting for the taxpayer which professional a taxpayer can utilize but it may also be illegally and unethically disenfranchising licensed accountants and lawyers, and consequently preventing them to freely practice their profession through regulatory biases and discrimination. An actuation that cannot be appreciated by the licensing entities like the Professional Regulation Commission or the the Supreme Court. 

Moreso, these regulations for accreditation indirectly turns the BIR into a participant in the pre-selection of taxpayers service contractors by unilaterally endorsing them through the regulation. Which by any measure is highly questionable, irregular, even so, suppressive and dictatorial. 

No matter how noble, the end does not justify the means. 

Tax on Sinners

The Sin Tax Law is set to be sign by President Aquino anytime soon and it is suppose to take effect starting January 1, 2013. Through this new law the government expects to generate revenues of Pesos 34 billion on the initial year. Around 15 percent will be allocated to local tobacco farmers and the rest to national health care programs.

The Sin Tax Bill or Law was premised on the negative health and social impact of alcohol and tobacco consumption. It is by all measure a sumptuary tax, a tax on undesirable social habits like smoking and drinking alcoholic beverages. It is a non-discriminatory tax levied to all social classes, meaning regardless of one’s buying capacity, rich and poor will pay the same amount of tax. Theoretically, the poorest sector should necessarily reduce consumption of alcohol and tobacco, at least for products that have this tax.  But would it prevent the poorer class to stop or reduce consumption? Well, lets see!

Alternative means and sources will sprout like mushrooms. The olden days of La y ' Baena’s would probably come back to life. These are unfiltered cigarettes wrapped in brown papers. I remember my Lola’s on both sides smoked them inverted with the burning end inside their mouth while bathing in their  “batalans” or wringing “labadas “ by the waterwell, and do you know how long they wringed their clothes and took their bath on those days to include the “libagan“ session using a coarse stone? Well, make a guess! “Pinos” of Nasugbu, Batangas, distilled from sugar cane may have a grand future. What about the “Lambanog” of Quezon, the “Basi “of the Ilocos Region. Marlboro Lights may now be labeled “Mamburao Lights”. Let’s not forget the “Tuba” contained in a 4” x 3’ bamboo cane. They use to carry and peddle them outside schools. Now, what is the point? The point is the revenue objective may be met but not the prevention premise of this law, and that is all there is to it.

Authority and Discretion Overlap

The Commissioner of the Bureau of Internal Revenue (CBIR) is determined to meet her revenue collection targets by all means even at the expense of individual rights and the freedom of enterprise. She may have exceeded her authority by issuing regulations that interferes with taxpayers judgment and the free exercise of profession (Please see related Blog on this entitled “BIR, Abuse and Human Rights”). The recent move of the BIR that aims to require professionals to post in their offices their billing rates similar to a sari-sari store undermines a professional's sworn code of conduct and ethics.  Certified Public Accountants (CPA’s) by code of ethical standard are inhibited from making solicitations through the posting of their rates publicly, to do so otherwise would equate to a violation subject to certain disciplinary measures to the detriment of the professional and the profession as a whole. The same can be true for other professions which are required to abide to a set rules of ethics.

Similarly, the Commissioner of the BIR is working to introduce amendments to the professional laws and statutes by requiring through the Professional Regulation Commission (PRC) the submission of income tax return before a professional can renew his or her license.What makes this recent move of the BIR chief abusive is it selfishly ignores other existing laws, rules and standards. Let us bear in mind that the BIR cannot by its mandate interfere with the practice of enterprise, individual or otherwise, before income is generated and the corresponding expenses are matched. Efforts to influence a taxpayers conduct of his business even before a taxable income is realized would be tantamount to harassment and coercion. Only after a taxable income is realized that the BIR may legitimately concern itself and poke a nose on the privacy of business subject to the time frame and limitations provided in the tax code.

Revenue Regulations are made to further the existing statute provisions through clarifications in the implementing procedures. Revenue Regulations cannot be use to indirectly assume legislative function by effectively altering or adding provisions in the existing law. The BIR should instead intensify its intelligence effort on specific industry where it felt the deficiency exist and it is not collecting the right taxes. It should program and expand its post audit as well.

Professional and business organization must strive to protect themselves from abusive regulations and ruling such as those mentioned here, from those that recklessly subjugates individual rights and freedom as guaranteed by the constitution. Regulations that limits free judgement; is suppressive in character; and is a departure from the spirit of the tax code provision, must be challenge through the court to weed out those that could be borne out of caprices, personal and political ambitions and at times by incompetence.