Philippine tax bureau chief aims higher in fight against corruption

Woman head of internal revenue bureau raised collection rate by 14pc last year after fixing her sights on corruption. Now she's aiming higher

PUBLISHED : Wednesday, 28 August, 2013, 12:00am
UPDATED : Wednesday, 28 August, 2013, 3:16am

Kim Henares began carrying a gun eight months after becoming the Philippines' chief tax collector. Her shooting instructor was the country's president.

Since she took over the Bureau of Internal Revenue three years ago, Henares has filed more than 180 tax-evasion complaints, investigated former world boxing champion Manny Pacquiao and boosted collection by 14.5 per cent last year - double the country's economic growth rate.

"I didn't take this job to become popular," said Henares, 53, who has a master's degree in law from Georgetown University in Washington and often carries a semi-automatic pistol.

"My job is to implement the tax code and collect revenue that must be collected. If people don't like me, that's fine."

Henares is among a coterie of senior women officials at the forefront of gun-toting President Benigno Aquino's crusade to erase a Philippine legacy of graft. Reversing decades of bribery and tax evasion would yield funds for public works that can spur growth to a target of as much as 8.5 per cent by 2016, as the government seeks to create jobs and lift millions from poverty.

Appointed by Aquino in 2010, Henares is pursuing every leak, from doctors and politicians who declare less income than they make to previously untaxed earnings at casinos and banks.

Her tenacity has helped the Philippines claw back some of the US$10 billion - 4 per cent of gross domestic product - that the government estimates is unpaid every year.

"She's the first commissioner of the bureau who dared to not be popular, who dared to rock the boat to pursue what is right," said Emmanuel Bonoan, chief operating officer at KPMG's local partner in Manila and a former undersecretary in the Department of Finance.

"A lot of people liked it before, when there was a lot of ambiguity. Under Kim, there is less ambiguity, so there is less wiggle room."

Henares is in her element at the tax office, having worked with Bonoan on a finance department campaign against tax evaders while she was deputy commissioner from 2003 to 2005.

I didn't take this job to become popular. My job is to implement the tax code and collect revenue that must be collected. If people don't like me, that's fine

Aquino asked her if she would head the internal revenue bureau months before he won the election.

Their collaboration is bearing fruit, with the Philippines winning its first investment grade ratings from Standard & Poor's and Fitch Ratings this year.

Few escape the scrutiny of Henares and her team.

The daughter of a luxury-watch businessman, she looks for potential tax evaders in the society pages of newspapers and magazines. "If you're ready to flaunt it, then you must have paid taxes on it," she said.

Calling herself an introvert who hates making speeches and socialising, she has been shown on television wearing a T-shirt sporting her bureau's slogan last year: "I love Philippines. I pay taxes."

Aquino, a crack shot, trained Henares and Justice Secretary Leila de Lima to shoot.

Aware of the threats Henares was likely to face, Aquino assigned four presidential guards to protect her. She still joins the president for target-shooting practice almost every week and favours an SVI Infinity gun that uses a .40 calibre bullet.

Henares is a better shot than her bodyguards, according to one of her aides.

She's also shown a willingness to go after any offender.

In 2011, the tax agency alleged that former president Gloria Arroyo's son Juan Miguel and his wife, Angela, evaded taxes, a case that has yet to be concluded. Arroyo was a godmother at Henares' 2001 wedding, a role traditionally reserved for close friends in Philippine Catholic marriages.

The next year, the bureau said boxer and congressman Pacquiao failed to submit documents proving he paid the right amount of taxes in 2010.

The investigation was dismissed by a city prosecutor.