RECORD FALL: The dismal yearend collection report of the Bureau of Internal Revenue showing it missing its 2007 target by P53.7 billion -- the biggest in local tax collection history -- should jolt the Arroyo administration.

First, that was a huge slab chopped off projected revenues meant for essential services to improve the quality of life of the masses and to public expenditures intended to boost productivity. Where will the government get replacement funds?

Second, there is no organized boycott, but many Filipinos seem to be looking for ways to avoid paying taxes. This happens when taxpayers see public funds being stolen or misused in scandalous proportions.

Third, disenchantment with government as dramatized by massive tax avoidance is a warning that something more ominous, possibly civil disobedience, lies ahead.

Fourth, the shortfall raises the questions: Was Malacanang fair in summarily firing the previous bureau chief when he missed targets arbitrarily set by his Finance superiors? Will it now fire his replacement?

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ALL TARGETS MISSED: Like a corporation scared of submitting an ugly yearend financial statement, the government has sold several prime properties just to raise revenue for reporting purposes. But such a stop-gap remedy did not work.

In a conference last week , OIC Asst. Commissioner Corazon C. Pangcog, who heads the collection service, presented the collection report for January to December 2007. It showed the bureau missing targets in all tax categories.

The BIR collected P712.098 billion, short P53.761 billion of the P765.859-billion goal. It missed its target by P39.574 billion for the first half of 2007, and by P15.186 billion for the second semester.

The shortfalls by tax type: Value added tax (VAT) short by P38.187 billion; income tax by P9.715 billion; percentage tax by P4.098 billion; and excise tax by P3.915 billion.

What did Commissioner Lilian B. Hefti tell Finance Secretary Margarito Teves presiding over the conference? Will one or both of them resign before the vaunted “attrition law” is applied on them?

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HEFTY LOSS: The biggest collection losses came from the Large Taxpayers Group, under Hefti, posting a shortfall of P38.818 billion against a goal of P469.752 billion. This accounted for 73 percent of the total shortfall.

Second laggard was Regional Operations under OIC Deputy Commissioner for Operations Nelson Aspe, whose office collected only P247.023 billion of the P260.717-billion goal. His P13.694-billion deficit was 20 percent of the total.

Collection for VAT, part of which is used for basic social services such as education, health and infrastructure, fell short by almost half (44.29 percent) of the goal.

This is puzzling. If it is true that the economy has been growing impressively, taxes on goods and services should be commensurately going up.

President Arroyo appointed Hefti in June last year to replace then Commissioner Jose Mario Bunag when he missed his May 2007 target by a tiny P1.8 billion.

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VAT BLUES: The way VAT is designed and collected, it will not work in the Philippines -- even if they have inserted “Reformed” before its name (now RVAT) to make it palatable.

The BIR reported a 44.29-percent shortfall for VAT, collecting only P15.041 billion of a P27-billion goal, incurring a deficit of P11.959 billion.

Aside from raising the VAT rate from 10 to 12 percent, the government expanded coverage to include oil, power, and transportation. The population is now groaning under this added imposition.

About 30 percent of VAT in 2006 should go to social services, including education and health, and infrastructure, such as farm-to-market roads. To sweeten the bitter pill, that share was increased to 35 percent in 2007; to 40 percent in 2008; to 45 percent in 2009; and to 50 percent by 2010.

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LOREN MIFFED: Her expensive lawyers and her pride should not drag Sen. Loren Legarda to another costly and futile battle at the Presidential Electoral Tribunal.

Loren looks in fine form as a rebounding senator and seems to be well-focused on the presidency in 2010. She should look ahead and not allow herself to be distracted by her losing her protest against Vice President Noli de Castro.

She knows that a motion for reconsideration will not overturn the PET's decision. She herself admits that her having taken an oath as a senator was abandonment of her quest for the vice presidency.

To save time, the PET could just dismiss her motion for reconsideration by saying “case abandoned” and that's it.

Maybe Loren simply wants the PET to rewrite, not really to reverse (which it is unlikely to do), its decision.

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TEACHERS' FUND: Loren said she would have accepted the decision based on the technicality of her having assumed her Senate seat, but the PET's citing lack of evidence, she said, was “totally unacceptable and unbelievable.”

The senator said she would seek reconsideration. She has that right, and apparently also the money to pay her lawyers raring to spring into action.

“As a senator advocating clean and honest election, I'll initiate a thorough review of laws, rules and regulations on the conduct of election protests, especially on presenting evidence,” she said.

She should, but it is doubtful if the PET would reverse itself even with that collateral activity of the complainant.

Or Loren could donate the money for her lawyers to voters' education or to a fund for teachers who lay their lives on the line whenever they report for election duty.

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