ESCUDERO SCOFFS AT BOC COLLECTION CLAIM

Revenue agencies should be more forthright in declaring how much of their collection for a month came from taxes paid by the government itself for its own imports like rice.

Sen. Francis Escudero posed this challenge after the Bureau of Customs (BOC) claimed it has surpassed its August collection goal of P20.8 billion.

But Escudero, chair of the Senate Ways and Means Committee, is pressing the BOC to reveal "to what portion of their collection is made up of Tax Expenditure Fund or TEF availments."

He also issued the same "disclosure challenge" to the Bureau of Internal Revenue after its officials likewise made the boast that the biggest tax collector breached its P82 billion collection target for August.

The TEF is a subsidy released by the Department of Budget and Management to government agencies and corporations mainly to settle customs duties and other taxes arising from the importation of goods.

One such heavy user of TEF is the National Food Authority, which uses it in settling taxes and duties on its rice importation pegged at 1.7 million metric tons this year. The TEF is also applied to cover tax payments of big-ticket capital outlays expenditures.

Escudero expressed alarm over the "marked increase" in TEF expenditures this year, and hints that "this spectacle of government paying taxes to itself so it can turn in a better fiscal report card is what is artificially inflating collection figures."

"For how can you explain the more than 300 percent increase in TEF use from the programmed P4.9 billion for the first seven months of the year to the actual P15.5 billion? " Escudero asked.

He said the January-July TEF expenditure this year rose 61 percent from last year's recorded P9.6 billion.

"Because of this, we can safely assume that P15.5 billion had been padded to total revenue output of the government for the first seven months" he said.

"What's obtaining here is clearly a TEF-aided collection. Customs and BIR are getting a little help from their friends in the government, without that assistance the revenue picture would have been bleaker," he said.

He said for "purposes of transparency and accuracy," the TEF should no longer be booked "as either expenditure or revenue because either way it bloats the two."

"TEF can in no way be defined as productive expenditure, it is not social services, it produces no service and buys no goods. It is also not the kind of revenue we want to constitute our tax effort on" Escudero went on.

The senator added that "the moro-moro of taking money from the left pocket of the government and putting it in its right pocket so it can boast that it is spending more for the people and collecting more taxes should be stopped."

He said TEF should be written off from the expenditure column of the 2008 national budget as well as the revenue program for next year "as it mutually cancels the two."