SOLON URGES REVIEW OF ‘OPLAN KANDADO’

AMID REPORTS OF ABUSE, LOST JOBS

A party-list lawmaker called for a review of the “Oplan Kandado” program of the Bureau of Internal Revenue (BIR), expressing alarm that it may not be producing the desired results amid reports of abuses and lost jobs.

Anak Mindanao Rep. Mujiv Hataman said no less than Finance Secretary Margarito Teves in recent dialogues with chambers of commerce has acknowledged possible abuses committed by some BIR personnel in enforcing the "Oplan Kandado" program.

Hataman said the solid accomplishment so far of the program, aimed at instilling “chill-factor” to tax-evading businessmen, was to render business establishments closed, whether temporarily or permanent, and put employees out of work.

He said the much-vaunted higher revenue to be generated by the program remains to be proven even as he noted the dismal collection record of the BIR in the first four months of the year.

From January to April, the peak months of the "Oplan Kandado" program, the BIR collected only P241.8 billion, down by P16.2 billion from the P258 billion it collected during the same months last year, when the "Oplan" was not enforced.

The Department of Finance (DOF) has even slashed BIR's full-year target collection of P850.6 billion to P798.2 billion because of expected lower tax collection this year.

The DOF said the “chilling-effect” of the padlocking of erring business establishments should encourage other businessmen to pay correct taxes and shore up government’s tax revenues by P10 billion more.

Hataman said the expected additional gains from the "Oplan" is now wishful thinking because for the first four months of the year alone, the government has already lost P16.2 billion.

“BIR’s Oplan Kandado has single-handedly put in reverse the job-generation program of the government by throwing workers out in the streets just because their employers are suspected of not paying the right taxes,” Hataman said.

He wondered how a business owner, after investing millions on his business and even managed to get a pricey location would risk losing his business just because he didn’t pay the right taxes.

The BIR recently closed several establishments on Boracay island, The Fort in Taguig City and in Morato area in Quezon City.

Hataman said that before he’s misunderstood as championing the lot of tax evaders, owners of erring business establishments should also be turned into “state witnesses” to squeal on corrupt BIR personnel who assured them that “everything is okey” as long as the “tongpats” money continues to flow.

The lawmaker urged the BIR to look into the alleged involvement of its personnel in corruption.

“Common sense dictates that these establishments could have not escape detection without the assistance of corrupt BIR employees,” he said. The BIR assigns a revenue chief for every district.

Hataman said he has met workers who recently lost their jobs after the establishments they worked in were closed by the BIR.

He said of the 40 business establishments padlocked or targeted for shutdown this month by the BIR, there could be 600 workers who would lose their jobs.

He said applying the so-called multiplier effect of economists, the closing down of 40 stores will have a negative multiplier effect of:

- lost jobs since 40 stores closed mean 600 or more people jobless if the store employs a minimum 15 workers;

- plus 2,400 more people affected if the worker has at least four dependents (600 x 4);

- losses for at least six suppliers affected if the store is a restaurant or a food business with one supplier employing three people (for a total of 18 people)

- revenue losses by local government units from business tax and permit renewal etc;

- lost income taxes from workers; and,

- lost collections by Social Security System (SSS) from the abrupt stoppage in the workers’ monthly contribution and other government agencies like Pag-IBIG and PhilHealth if the worker is a member.

Hataman said the families of workers will also stop patronizing restaurants, movie houses and other spending activities that are important in shoring up private consumption, which registered a decline in the first quarter of 2009.

“There’s a slew of revenue stream and sectors that would be disrupted for every closing of a business establishment,” he said.

Hataman said even if the closed establishment is allowed to open weeks after complying with the BIR demands, the stigma of being tagged as a tax evader and the foregone revenues will remain.

“Above all else, while I commended the BIR chief and the DOF secretary for coming out with this program, closing down business establishments and affecting workers and their families do not foster business confidence during an economic crisis and when government is asking the private sector to boost investments to pump-prime the economy,” the lawmaker said.

He said there could be a way for a suspected tax-evading establishment to continue to operate while adhering to a BIR-sanctioned tax re-payment scheme without endangering the livelihood of workers.

Hataman welcomed the pronouncements made by Finance Secretary Teves that the Kandado program is undergoing review after reports that some BIR officials are abusing the program.