BATU, Indonesia. Photo by Jes Aznar

Saturday, August 28, 2010

My interview with the country's internal revenue chief

BIR Commissioner, Kim Henares: LOVE (of country) and TAXES | The Philippine Star Other STAR Sections Starweek Magazine

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MANILA, Philippines - Kim Jacinto-Henares has assigned herself a daunting task.

She wants, with an infectious idealism pushing her, to correct 106 years of wrong practices in and wrong impressions of the Bureau of Internal Revenue (BIR), the government’s main revenue agency.

“You have to correct 106 years of wrong impression. If I’m able to do that in three months, then I would say I’m pretty successful,” Henares tells STARweek.

Henares is the new chief of the BIR, perceived as one of the most corrupt agencies of government. An accountant and a lawyer, the US-educated Henares acknowledges that her task is enormous and challenging.

“I’m very realistic. I know that before I see an uptick, we will see a downtick. It’s hard. It’s like rearing a child. You have to show people that you are serious,” she says in a soft but clear voice, her graciousness belying the steel that undergirds her convictions.

Henares knows how difficult it can be because she is not new to the BIR, having stayed in the revenue service from August 2003 to November 2005. During such period, she held the position of Deputy Commissioner of the Special Concerns Group and office-in-charge of the Large Taxpayers Service.

She finished her Bachelor of Science in Commerce major in Accounting degree at the De La Salle University and was admitted as a Certified Public Accountant (CPA) in 1981. She is also a lawyer, graduating Second Honor Medal from the Ateneo de Manila University.

Her education also includes a Master of Laws degree major in International and Comparative Law from Georgetown University in Washington DC.

Prior to the BIR, Henares worked as a tax lawyer at SGV & Co., was a partner at the Yap Jacinto Jacob Law Office, vice-president for corporate and legal affairs of ING Bank, governor of the Board of Investments and Senior Private Sector Development Specialist for the World Bank Group.

It is her previous experience in the agency that convinced Henares that she could contribute to the government.

“My experience in the BIR was a very nice experience. It was a very fulfilling experience. This previous experience encouraged me to come back. The impression that the BIR people left me were good impressions,” she says.

More importantly, she says that her objective and the objective of her superiors – President Benigno Aquino III and Finance Secretary Cesar Purisima – are the same.

“Whenever I go into a job, the most important thing is that the objectives of my superior and mine are the same,” she explains.

This objective – the focus of all their actions for the next six years – is to collect the revenues that rightfully belong to the government so that it would be able to provide the required services to the people. Every peso, she says, would go to state coffers where it belongs.

“I’m also idealistic. My feeling is that I can contribute. If not for love of country, I wouldn’t be here,” she admits.

Henares is racing against time to put the proper systems in place, but she believes that six years is enough time to do it.

“The single biggest problem of the BIR is that we are so intelligent. If people feel they can get away with it, they do so. But there is also an upside to that. If they feel they can’t get away with it, they won’t. So it’s really convincing people that they cannot get away with it this time – and forever more,” she says.

As such, her general plans for the BIR are to implement existing tax laws strictly, to implement internal reforms and to put in place a new data and filing system for the entire BIR.

She is also giving erring taxpayers a sort of amnesty or a chance to settle their obligations before she brings the full force of her office on them.

“For those who have not filed the correct return, they can still file,” Henares says.

The agency is now drafting a resolution that would detail the terms of the program, which includes abating surcharges or penalties.

In terms of putting up a new system, Henares says she hopes to see this in place in the next two years.

“What I want is for the whole process to be an integrated system such as when the taxpayer gives us a tax return, it would be as close to an electronic data form as possible. As much as possible, data would be lodged by the taxpayers themselves in electronic data form so that we would not have to spend too much time and effort in converting it into electronic data form. So in that instance, we can easily match it,” she explains.

The BIR will also be working with other sectors for data sharing. These include the Bureau of Customs, the National Statistics Office and the various local government units.

There are limitations to the BIR’s access to information because of the Bank Secrecy Law, but Henares hopes that someday, in a better Philippines, the agency would also have enough access to personal records such as that of the Anti-Money Laundering Council.

All these plans notwithstanding, Henares believes the path of reforms is not easy, with the Philippines mired in patronage politics or the padrino system.

Not even two months into her new job, Henares says it is as hard as she imagined.

“I imagined it to be hard work. I put a lot of pressure on myself also so I want to put the reforms in place in a much shorter timetable,” she says, also admitting that she does not intend to “cling to this job,” maybe not even staying on for the whole six years of the Aquino administration if she can finish what she set out to do before 2016.

With her new job, Henares now has to wake up earlier than usual.

“I have to wake up a lot earlier because I have to be here (at the BIR head office in Quezon City) at 8 a.m. Sometimes, I have to be at a (television or radio) studio at 7 a.m.,” she shares.

Nevertheless, Henares, who celebrated her 50th birthday recently, tries to leave Sundays for hearth and home, with husband businessman Dan Henares. “I try as much as possible to leave Sundays free and to make sure that Sundays are devoted to family.”

She and her husband, a car and motorcycle enthusiast, enjoy driving around the country or going out of town.

“He likes cars so we drive around in a convertible,” she reveals.

Henares is such a low-profile person that not many people know that she is Chinese-Filipino, or that she likes to do stuff that, in her own words, are “not very feminine.”

“I like doing house work but of a different kind – carpentry, plumbing, painting. Before, when I was studying in the US, I was thinking of buying an old house and repairing it. It’s not feminine stuff but that’s me. People say Leos are very mechanical,” she says. In fact, she and her husband, whom she’s known for 25 years, like to tinker with cars and motorcycles.

What she still has to get used to is having bodyguards following her around, even to the grocery. President Aquino has assigned members of the Presidential Security Group to keep a tight watch on her.

Henares, nevertheless, does not mind this adjustment because she wants to be able to contribute to the country’s development.

“I believe that it’s a make or break time for the Philippines. It’s either we make it or we break it. We should take this opportunity and we should give it our 101 percent. All of us should help. That’s the reason I took the job.”