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Looking for the big tax fish and an alphabet soup

IN ITS effort to shore up revenues and bridge the chronic budget deficit, the administration of President Gloria Macapagal Arroyo has launched a series of jazzed-up campaigns designed avowedly to catch tax evaders, smugglers and crooks.

Last year, through the Bureau of Customs and Bureau of Internal Revenue, the government launched RIPS — or the Revenue Integrity Protection Service programme. A month ago, it launched RATE — or the Run After Tax Evaders campaign. A fortnight ago, it launched RATS — or the Run After Smugglers project.

To be fair, even as the acronyms seem to have drowned the people in alphabet soup, the campaigns have thus far scored some success in terms of projecting a spirited and focused effort to check slippages in tax collection.

Last month, tax collections soared to a record high and allowed the government to post a budget surplus for the first time in four years. Although April 15 is the national deadline for payment of income taxes, the achievement cannot be whisked off as insignificant. Apart from generating a budget surplus of 3.3 billion pesos (about US$61.1 million), non-tax revenues also increased by 9 per cent to 82.7 billion pesos (about US$153 million), while expenses fell by 5 per cent to 79.4 billion pesos (about US$147 million).

The pace of the three complimentary campaigns has been frenetic as well. Under RATE, the Finance Secretary Cesar Purisima has instructed his ministry officials to file complaints with the Department of Justice against at least two evaders a month, or one every two weeks.

Under RATS, the goal is similarly to file complaints against two smugglers every month. Under RIPS, a finance department unit has been assigned to conducting lifestyle checks and file graft charges against revenue and finance officials.

Without missing a beat, the Bureau of Internal Revenue has gone to town and filed complaints against three hugely popular entertainment stars — film and TV actor Richard Gomez, ‘Asia’s songbird’ Regine Velasquez, and TV drama queen Judy Ann Santos.

Sufficiently intimidated by the high visibility campaigns against celebrities, actors and actresses last week sat through a briefing organised by revenue officials on filing the right taxes the right way.

Apart from silver screen’s stars, the revenue office has also filed complaints against 14 other celebrities. Those who had been labelled as tax evaders include a fitness columnist, an expatriate basketball star, a cosmetic surgeon, executives of a pension plan in financial distress, and several other businessmen.

What has hurt the accused the most is the widespread publicity on print and broadcast media that Revenue Commissioner Guillermo Parayno has dutifully assured follow the filing of each complaint.

A retired general with sharp and scrupulous study and practice in psychological warfare, Parayno has since abandoned an earlier government policy of securing settlement deals with tax cheats. Prosecution, including trial by publicity no less, of tax evaders has clearly delivered immediate results.

The accused have separately but promptly delivered cash payment of their unpaid taxes. In contrast, Parayno has noted that settlement had only encouraged taxpayers to evade payment for extended periods of time, so they could negotiate a lower compromise amount.

By putting fear into the hearts of tax evaders, no matter what their fame or fortune, the campaign has favourably convinced the people about government’s firm resolve to improve tax collection. The choice of celebrities as subjects of complaints in its showcase cases is as much a deliberate as it’s a brilliant move. The singular message of the cases, according to a revenue official, is that "power and fame are no ticket to immunity" from tax prosecution.

What is worth watching in the next few weeks is who would be rounded up next as tax evaders, smugglers and crooks.

Despite largely positive feedback on the tax alphabet soup campaigns, not a few journalists and political analysts have expressed a common desire for authorities to go after even more powerful and more famous persons. Their top picks? Business tycoons and politicians who are among the biggest and closest patrons and partners of President Arroyo! It is only when revenue officials hail to court those most chummy with Ms Arroyo that the tax alphabet soup campaigns would be put to an acid test, they say.

Otherwise, RIPS, RATE and RATS could just go down in history the way of most other government reform initiatives — occasional noise-making, a series of false starts, and good intentions with just a few initial good results and nothing else besides.

Malou Mangahas is a senior journalist based in Manila