Golden carrot
Golden carrot
Posted 11:25pm (Mla time) Jan 24, 2005
Inquirer News Service
Editor's Note: Published on page A12 of the January 25, 2005 issue of the Philippine Daily Inquirer
IT'S HARD to say if the highly publicized filing of graft cases against high-living internal revenue and customs officials has put the fear of the law in the hearts of their peers and the rank and file. What is clear is that it did not have the equally desirable effect of raising higher revenues for the debt-ridden national government, or at least not by as much as what the administration wanted. While the Bureau of Customs reported a P10-billion surplus vis-à-vis its collection target of P112 billion in 2004, the Bureau of Internal Revenue admitted that it was P6.3 billion short of its target of P470 billion, even though it was able to increase its collection by 10.2 percent over that of the precious year.
But even as the effectiveness of the stick of criminal prosecution still remains to seen, the administration has unveiled a carrot that ought to be as tempting as any enticement offered by smugglers, tax evaders and other criminal characters. A bill approved by Congress last week provides generous incentives to real achievers in the two revenue-collection arms of the government as well as punishment for those who fail to deliver.
Under the bill, which President Gloria Macapagal-Arroyo is set to sign today, officials and employees of the BIR and the BOC will get to share among themselves part of the revenues they collect in excess of the targets set by the Cabinet-level Development Budget Coordinating Committee (DBCC). Specifically, the agencies will get 15 percent of their extra collections if they exceed their targets by 30 percent, plus an additional 20 percent of any amount beyond that. For instance, had the bill been in place last year, customs officials and employees could have divided among themselves something like P1.5 billion for exceeding the target collection by P10 billion. That would have at least doubled or even tripled the incomes of everyone in the bureau, which had a budget of P1.12 billion last year.
Of course, getting 3-or even 10-times their present salaries would still not allow some grossly corrupt officials and employees to maintain their present lifestyles. On such incomes, they cannot afford to buy the kind of mansions and luxury vehicles that some of them have been found to own; or to go abroad as often as they wish. But any honest and hardworking civil servant would be happy to earn that kind of money, since it should be sufficient to provide a comfortable existence to any family of modest ambitions. It may not make anyone fabulously wealthy, but this system of rewards and incentives offers a way for those who work in two of the most corrupt government agencies an opportunity to earn much higher incomes honestly and on the basis of their actual work.
It is not as if the government is trying to squeeze blood from stone, by demanding higher collections and threatening dismissal of those who cannot deliver. There is plenty of room for improvement in the revenue collection effort. The National Tax Research Council, for instance, has estimated that the government loses more than P120 billion yearly on account of uncollected taxes. Smuggling, on the other hand, is said to cost the government P60 billion yearly in uncollected import duties and taxes. If the BIR and the BOC can recover a substantial part of such losses, then they should not only be able to achieve their targets but also earn enough to make everyone, except the really greedy, happy.
How much the workers will share by way of incentives will depend largely on the targets set by the DBCC. And in the first year of the program at least, the committee cannot go wrong if it sets targets that are on the conservative side if only to ensure that that there will be rewards to parcel out at the end of the year. This is necessary to demonstrate how the system works and provide a boost to the workers, who will have to strive increasingly harder to achieve the progressively higher targets that will be set each year. Setting the incentives program off to a good start should take precedence over the need to raise more revenues quickly to narrow the deficit, pay off some of the government's debts and get the seal of good housekeeping from international credit rating agencies.
Posted 11:25pm (Mla time) Jan 24, 2005
Inquirer News Service
Editor's Note: Published on page A12 of the January 25, 2005 issue of the Philippine Daily Inquirer
IT'S HARD to say if the highly publicized filing of graft cases against high-living internal revenue and customs officials has put the fear of the law in the hearts of their peers and the rank and file. What is clear is that it did not have the equally desirable effect of raising higher revenues for the debt-ridden national government, or at least not by as much as what the administration wanted. While the Bureau of Customs reported a P10-billion surplus vis-à-vis its collection target of P112 billion in 2004, the Bureau of Internal Revenue admitted that it was P6.3 billion short of its target of P470 billion, even though it was able to increase its collection by 10.2 percent over that of the precious year.
But even as the effectiveness of the stick of criminal prosecution still remains to seen, the administration has unveiled a carrot that ought to be as tempting as any enticement offered by smugglers, tax evaders and other criminal characters. A bill approved by Congress last week provides generous incentives to real achievers in the two revenue-collection arms of the government as well as punishment for those who fail to deliver.
Under the bill, which President Gloria Macapagal-Arroyo is set to sign today, officials and employees of the BIR and the BOC will get to share among themselves part of the revenues they collect in excess of the targets set by the Cabinet-level Development Budget Coordinating Committee (DBCC). Specifically, the agencies will get 15 percent of their extra collections if they exceed their targets by 30 percent, plus an additional 20 percent of any amount beyond that. For instance, had the bill been in place last year, customs officials and employees could have divided among themselves something like P1.5 billion for exceeding the target collection by P10 billion. That would have at least doubled or even tripled the incomes of everyone in the bureau, which had a budget of P1.12 billion last year.
Of course, getting 3-or even 10-times their present salaries would still not allow some grossly corrupt officials and employees to maintain their present lifestyles. On such incomes, they cannot afford to buy the kind of mansions and luxury vehicles that some of them have been found to own; or to go abroad as often as they wish. But any honest and hardworking civil servant would be happy to earn that kind of money, since it should be sufficient to provide a comfortable existence to any family of modest ambitions. It may not make anyone fabulously wealthy, but this system of rewards and incentives offers a way for those who work in two of the most corrupt government agencies an opportunity to earn much higher incomes honestly and on the basis of their actual work.
It is not as if the government is trying to squeeze blood from stone, by demanding higher collections and threatening dismissal of those who cannot deliver. There is plenty of room for improvement in the revenue collection effort. The National Tax Research Council, for instance, has estimated that the government loses more than P120 billion yearly on account of uncollected taxes. Smuggling, on the other hand, is said to cost the government P60 billion yearly in uncollected import duties and taxes. If the BIR and the BOC can recover a substantial part of such losses, then they should not only be able to achieve their targets but also earn enough to make everyone, except the really greedy, happy.
How much the workers will share by way of incentives will depend largely on the targets set by the DBCC. And in the first year of the program at least, the committee cannot go wrong if it sets targets that are on the conservative side if only to ensure that that there will be rewards to parcel out at the end of the year. This is necessary to demonstrate how the system works and provide a boost to the workers, who will have to strive increasingly harder to achieve the progressively higher targets that will be set each year. Setting the incentives program off to a good start should take precedence over the need to raise more revenues quickly to narrow the deficit, pay off some of the government's debts and get the seal of good housekeeping from international credit rating agencies.
posted by Dante at 12:00 AM
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