Solon wants to abolish the BIR; seeks creation of Philippine Revenue Authority

By LORELEI CASTILLO

A NEOPHYTE lawmaker is strongly pushing for the creation of the Philippine Revenue Authority (PRA) that would improve the effectiveness of tax collection in the country.

Under House Bill 6007, authored principally by Rep. Liwayway P. Vinzons-Chato (Lone District, Camarines Norte), the Bureau of Internal Revenue (BIR) will be dissolved and its functions and powers will to be transferred and vested in the Authority.

Vinzons-Chato said the establishment of the Philippine Revenue Authority (PRA) as provided for under House Bill No. 6007, would enhance government’s efforts at raising revenues to finance operations of the country consistent with fiscal policy and revenue collection targets.

“The PRA will be endowed with fiscal and administrative powers that shall allow a decentralized system of administration necessary to discharge its mandate,” she said.

The PRA will be tasked to comprehend the assessment and collection of all national internal and customs revenues, taxes, fees, and charges.

Moreover, it will enforce all forfeiture, penalties and fines connected therewith, including the execution of judgments in all cases decided in its favor by the Court of Tax Appeals and the ordinary courts, Vinzons-Chato said.

The bill otherwise known as the “Philippine Revenue Authority Act” would integrate the work of Customs and Internal Revenue aimed at ensuring that an agency is best placed to deliver the benefits of customer service and of effective and efficient operation to the country.

Likewise, the revenue generating function of the Bureau of Customs (BOC) will be transferred to the PRA in acknowledgment of the inherent differences in skills and processes relevant to frontier control and revenue generation.

According to the lawmaker, the Authority shall give effect to and administer the supervisory and police powers conferred to it by the National Internal Revenue Code (NIRC), Customs Code or other laws except only those, which remain vested with the former BOC, which shall be called as the Philippine Border Services Authority.

“The proposed law might be seen by some as drastic, but in times when the competitiveness of governments are measured by how well it manages its bureaucracy for the effective delivery of public service, this proposal becomes more of a necessity,” Vinzons-Chato pointed out.

She said the proposed measure introduces a paradigm shift in tax administration which was based on a study conducted by Mr. David Henry, former New Zealand Commissioner of Inland Revenue, entitled “Transformation of the Bureau of Internal Revenue of the Republic of the Philippines” which was commissioned by the lawmaker when she was still the BIR Commissioner.

According to Vinzons-Chato, the recommendation of Mr. Henry for a shift to a contract-management approach wherein the outputs of the BIR are determined by the terms of the purchase contract entered into with the Department of Finance has been adopted by countries such as Canada, Australia, Belgium, Denmark, the Netherlands, Ireland, Spain and the United Kingdom.

“Tax administration is most effective when it takes a holistic view of business accounts rather than focus only on the requirements of direct or indirect taxes,” Vinzons-Chato said. http://www.congress.gov.ph

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