By Angelo S. Samonte and Lailany P. Gomez, Reporters

PRESIDENT Gloria Arroyo appointed a returning Bureau of Internal Revenue (BIR) official as the new head of the country’s main tax agency, the Office of the Press Secretary said Tuesday.
The new BIR chief, Joel Tan-Torres, said he will implement “high-profile” measures to avert the agency’s continued revenue slide by monitoring bazaars that sprout during the holiday season and slapping a 5-percent tax on campaign expenses.

“Tan will serve as OIC [officer in charge] for the meantime. We appreciate Commissioner [Sixto] Esquivias’s service as well as his delicadeza,” Press Secretary Cerge Remonde said.

Before his appointment as OIC, Tan-Torres was serving as senior deputy commissioner at the BIR by virtue of a Palace order creating the new position. Prior to his appointment, Tan-Torres worked as a senior partner of auditing firm SGV. But he served as a key official of the bureau during a previous administration.
With the appointment of an OIC, the Palace said the BIR will improve tax collection to rein in the ballooning budget deficit.

Presidential economic spokesman Gary Olivar said improving tax collection is important for the government to address national concerns and make the economy stronger in the wake of the global financial crisis.
The BIR is tasked to raise P798.5 billion this year to help plug the government’s P250-billion fiscal gap.

Typhoons cited for foregone revenues

“The revenue collection efforts have been seriously impaired as the effects of [a] weaker global economy lowers the level of taxable economic transaction,” he said.

Records show that the BIR collected only about P500 billion from January to September this year, falling short of target by P39.2 billion.

Typhoons Ondoy and Pepeng, which devastated Luzon, were a major factor cited as the cause for the foregone revenues.

In a separate briefing, Tan-Torres said the agency will resort to a “high visibility” campaign in the remaining months to lower its emerging shortfall of P39 billion.

Campaign expense tax covered by law

He said the power to impose a tax on campaign expenses, which is meeting stiff opposition from lawmakers, is covered by Revenue Regulation 8-2009.

“We are taxing campaign expenditures by way of payments paid on suppliers of goods and services,” he said, adding that, “We are not taxing the contributions to candidates and political parties.”
Fresh revenues expected from the 5 percent tax would run from P1 billion to P1.5 billion.

Tan-Torres said the BIR will also conduct strict monitoring of Christmas bazaars and other tiangges during the holiday season under “Oplan San-Tax-Klaus” from November 15 up to end of December.
For the long term, the BIR will look into plugging the loopholes created by tax incentive measures passed earlier by Congress, Tan-Torres said.

He cited the Personal Equity and Retirement Act, the Tourism Development Act and existing incentives program of the Philippine Export Processing Zone as examples of revenue-eroding measures.
The projected annual revenue loss from the slew of new tax-eroding measures is between P60 billion and P65 billion.

Tan-Torres said the agency’s “full year target will not be changed.”
Esquivias resigned Friday citing his failure to meet the agency’s collection target.