MANILA, Philippines?The Bureau of Internal Revenue (BIR) will investigate traders and officials involved in the massive importation of rice to ensure that the government gets its fair share of taxes from the transactions, Finance Secretary Cesar V. Purisima said yesterday.

The BIR will also go after heirs to substantial estates not paying the proper tax. Purisima said the move was part of efforts to raise the collection of estate taxes, which amount to only about P1 billion a year.

Purisima said the BIR would get a list of rice traders from the National Food Authority (NFA), which President Aquino said brought in excessive volumes of rice in 2004 and 2007.

The finance secretary said officials involved in the approval process, including former Agriculture Secretary Arthur C. Yap, now a congressman, would also be investigated.

?No one is excluded,? Purisima said, but he reiterated that ?this is not a witch-hunt [and] there is no political vendetta.?

This is not the first time that the Department of Finance under Purisima has trained its sights on Yap.

Yap and father

In 2005, Yap and his father Domingo were named in a tax evasion case filed with the Department of Justice as part of the then newly launched Run After Tax Evaders program.

The Yaps were cited in their capacity as officers of the family owned DHY Realty and Development Inc., which allegedly failed to pay P4 million in taxes related to the purchase of a property in 1997.

The younger Yap resigned from the Cabinet in June 2005, but Purisima did the same a month later when he led a mass resignation of Cabinet officials who wanted then President Gloria Macapagal-Arroyo to step down.

Later that year, the justice department dismissed the case against Yap, who subsequently resumed office.

Yap himself served as NFA chair before he was first appointed agriculture secretary in July 2004.

Lifestyle check

Mr. Aquino said in his State of the Nation Address on July 26 that the NFA imported rice in volumes that were many times over what was needed in 2004 and again in 2007.

Purisima said the BIR would check whether traders, who took part in the rice importation, had paid the proper taxes.

?There are substantial gains there given the volume of imports done,? he said. ?We will do a lifestyle check of all those involved in the importation of rice.?

Probe accountants, lawyers

In addition, the BIR will check on accountants, lawyers and banks who may be helping tax evaders, Purisima said.

Accreditation of accountants with the BIR will be reviewed considering that many companies? books are audited by a single person when such undertaking needs a large staff.

?If [auditors] sign financial statements blindly, we have various courses to address that,? Purisima said.

?This may involve filing cases against accountants and even lawyers who may have acted as accomplices to tax evasion,? he said.

Banks, too

Purisima said a similar monitoring of banks was being planned, especially those which allow companies to use a ?second book? for credit purposes.

He was referring to the practice of unscrupulous firms that keep one book for the taxman and another for creditors.

On the program to increase estate taxes, Purisima said deaths in 2005 and 2006 averaged about 400,000 a year.

?That amounts to approximately P2,500 [in estate tax collection] per death,? the finance chief said.

The figure should be higher considering that there were ?many people who have passed away but to whom large amounts of wealth were attributed to,? he added.

Country clubs, car dealers

The BIR has access to data from homeowners? associations, golf and country clubs, dealerships of expensive cars and other entities related to the high life, according to Purisima.

?Information is very easy to obtain,? he said. ?We can even check the Forbes [magazine?s] list of the Philippine rich over the years.?

Purisima also warned banks against allowing the heirs of rich people to close bank accounts without them paying the 20-percent estate tax.

Project RIP

In February, then Internal Revenue Commissioner Joel L. Tan-Torres said the BIR expected to collect an additional P10.7 billion in estate taxes through a campaign he dubbed ?Project RIP.?

Tan-Torres said the campaign was also meant to intensify assessment and maximize collection of estate tax by increasing public awareness of its proper payment.

The legal heirs should know that after the death of a loved one follows the responsibility to comply with the laws of the government, he said.

Citing National Statistics data, Tan-Torres noted that the number of registered deaths were 403,191 in 2004; 415,271 in 2005 and 389,081 in 2006.

During these years, BIR data showed that 29,198 estate tax returns were filed in 2007; 29,863 in 2008 and 26,811 in 2009.

The BIR earlier this year issued Revenue Memorandum Order No. 10-2010, which mandates BIR offices to work with public and private institutions to access information about heirs, including civil registers, hospitals, memorial parks, cemeteries, funeral parlors, crematoriums, judicial clerks of courts, newspapers (obituaries), life insurance firms and other financial entities.