The author is the senior policy analyst and a member of the Management Collective of Action for Economic Reforms.

Some quarters argue that the Bureau of Internal Revenue (BIR)
Commissioner lacks the necessary instruments to discipline erring and
inefficient personnel, thus the urgent need to restructure the agency.

But the notion that the BIR Commissioner is helpless against
incompetent subordinates is baseless. There are two principal
management functions available to the government that should allow for
the effective running of the BIR – the power of control and
supervision, and the power of administrative discipline.

Power of supervision and control. Generally, the executive body is
organized along a hierarchical structure from the president, the head
of departments, the bureaus down to its smallest unit. One key
management power is the power of supervision and control over
subordinate offices or personnel. This power is conferred generally by
the Administrative Code of 1997, and specifically by special laws
covering certain agencies.

This power of supervision and control is enormous. It includes the
authority to act directly whenever a specific function is entrusted by
law or regulation to a subordinate; to direct the performance of duty;
to restrain the commission of acts; to review, approve, reverse, or
modify acts and decisions of subordinate officials or units; to
determine priorities in the execution of plans and programs; and to
prescribe standards, guidelines, plans and programs.

Related to this power is the authority of the BIR commissioner to
assign or reassign internal revenue officers and employees, as provided
in Sec. 17 of the National Internal Revenue Code (NIRC).

The extent of the power is definitely comparable to the management authority in private entities.

Administrative discipline. The power of supervision and control is not
a toothless one. It goes hand in hand with the authority to discipline
subordinates. The BIR Commissioner, as head of office, has the
jurisdiction to investigate and decide on matters involving
disciplinary action against officers and employees under their
jurisdiction (the investigation may be delegated to lower-rank

The Administrative Code provides a long list of grounds for
disciplinary action: dishonesty, oppression, neglect of duty,
misconduct, disgraceful and immoral conduct, being notoriously
undesirable, discourtesy in the course of official duties, inefficiency
and incompetence in the performance of official duties, and so on. The
penalties that may be imposed include removal, demotion, or suspension.
The employee may also be preventively suspended while investigation is
pending. The procedure may be summary in certain cases.

The disciplinary action may also be filed directly with the Civil
Service Commission. The Ombudsman likewise has concurrent
administrative jurisdiction in certain cases. An appeal process is

It may be true that the requirement of a valid ground and due process
for disciplinary action, and the process of appeal, at times, can slow
down the process. This, however, is not unique to the public sector.
The private sector is also required under the Labor Code to observe due
process and establish a valid ground in the discipline or dismissal of
personnel. An appeal process is likewise available.

Criminal liability. In addition to being administratively liable, a
public officer or employee may also be criminally liable for acts in
connection with the performance of his functions. The NIRC (Title X,
Chapter III) provides a long list of criminal acts of officials, agents
or employees of the BIR. The penalty for any of the said acts is quite
stiff. It includes a fine not less than P50, 000 but not more than
P100, 000 and imprisonment of not less than 10 years but not more than
15 years, and the additional penalty of perpetual disqualification to
hold office, to vote, and to participate in any public election.

These powers and the provision for criminal liability, when combined
with the proper exercise of the Commissioner’s powers under Sections 5
(power to obtain information, to summon, examine, and take testimony of
persons) and 6 (power to make assessments and prescribe additional
requirements for tax administration and enforcement) of the NIRC,
provide the Commissioner with ample instruments to effectively run a
tax administration bureaucracy and to enlarge taxpayer compliance. The
recent move by BIR Commissioner Guillermo Parayno to reshuffle key
revenue officers and the launch of a tax mapping or tax compliance
verification drive are examples of fresh attempts at the effective use
of these powers.

Not enough to stem corruption. While the proper and creative exercise
of the vast powers of the commissioner is enough to improve tax
compliance and bureaucratic efficiency, they might not be enough to
stem corruption, particularly bribery. What must be emphasized is that
this is not just a problem of the bureaucracy; the other half of the
problem is a bribing private sector. In the face of the mutual selfish
gain for the tax officer and the taxpayer to engage in bribery,
stemming corruption will remain a big challenge whether in the present
or in any restructured revenue agency. It is a problem that will have
to be addressed not only at the level of the bureaucracy, but at the
level of the private sector as well.

Still, the BIR Commissioner should be decisive in addressing corruption
when opportunity presents itself. The recent investigative report of
the Philippine Center for Investigative Journalism that documents
evidence of unexplained wealth of certain BIR personnel is an
opportunity for decisive and determined action. The commissioner must
work with the office of the Ombudsman and the Solicitor-General to
investigate the unexplained wealth and to initiate the appropriate