Senators score BIR over ‘cavalier’ attitude in hearing of ‘priority’ bill

MANILA, Philippines — Senators scored the Bureau of Internal Revenue (BIR) over its supposed “cavalier” attitude during the deliberations of a “priority” bill seeking to assist financial institutions reeling from the economic impact due to the coronavirus pandemic.

This, after representatives sent by the BIR to the hearing of the Senate banks, financial institutions and currencies committee on Wednesday failed to provide senators with categorical answers and appropriate data.

The committee was tackling the Financial Institutions Strategic Transfer (FIST) Act which seeks to encourage financial institutions to sell their nonperforming assets to asset management companies to be created as so-called financial institutions strategic transfer corporations that specialize in the resolution of distressed assets by providing fiscal incentives.

These include tax exemptions and reduced registration and transfer fees on certain transactions.

It was Senator Grace Poe, chair of the committee, who first asked the BIR on its position on the bill and the impact of the measure on the country’s tax collections.

In response, the BIR representative said: “In terms of our collection, it will affect it because… there’s an adverse impact on our collections.”

“Right now, Ma’am, we are not in favor of these tax exemptions,” the representative added.

At this point, Senate Minority Leader Franklin Drilon pointed out that the BIR should have sent a “more ranking” official to participate in the hearing.

“The Bureau of Internal Revenue is a very important resource person here as there will be incentives granted and it will affect the revenue stream,” Drilon said. “With all due respect to the representative of BIR, I wish they would send somebody more ranking who can speak for the BIR and we could hardly understand the statement of the BIR representative.”

Drilon expressed hopes that the BIR can have “better participation” in future discussions on the measure.

“This bill will affect our revenue stream… I hope that message can be sent to our BIR officials,” he added.

Poe agreed with Drilon, saying it appears that the BIR does not realize the importance of their participation in the hearing.

Senate President Pro Tempore Ralph Recto then asked the BIR about the amount of tax subsidy the government has provided under the Special Purpose Vehicle (SPV) Law.

The said law provided fiscal incentives from the transfer of banks’ non-performing assets to SPVs.

The BIR representative, however, was not able to provide exact figures and just promised to furnish the committee a copy of the data.

“Right now, we don’t have the data but we will note that, we will note it and we will provide it as soon as possible,” the BIR representative said.

In response to this, Recto raised the same concern as Drilon.

Recto also pointed out that the BIR expressed opposition to the tax provisions of the measure, which is a priority measure for the finance department.

“Just a comment, my understanding that this was a priority measure of the finance department as well as in conjunction with the BSP. Now the testimony of the BIR here is that they are against the tax provisions or incentives in this measure. But without the tax incentives in this measure, there is no bill,” he said.

“I’m surprised that they are not even prepared for the meeting today to give us how much tax subsidy [we provided],” he added.

Drilon, likewise, expressed disappointment over the “cavalier” attitude shown by the BIR.

“It would appear that the committee and the Senate is more interested in the passage of this measure in support of the Bangko Sentral [ng Pilipinas],” he said.

“The BIR has taken a cavalier attitude and is not even prepared to state its position and as Senator Recto so correctly said, while the Bangko Sentral and to my knowledge and the DOF Secretary is in support of this bill,  here comes the BIR saying that they are opposed to the bill,” he added.

At one point, Drilon also suggested to Poe to suspend the hearing earlier than intended until the BIR can come up with its official position on the measure and send a more ranking official.

Poe, however, opted to let the hearing continue for around another hour for senators to ask questions to other resource persons from other agencies.

Before suspending the hearing, Poe reminded the BIR and other concerned government agencies, like the Department of Finance, to send higher ranking officials to the next hearing.

EDV