After revealing that several business groups, including foreign trade chambers, had complained about shake-downs by agents of the Bureau of Internal Revenue (BIR), Senator JV Ejercito showed the ways this was done.

The first scheme is the issuance of multiple letters of authority (LoA) within a taxable year or in subsequent taxable years. Taxpayers in Quezon City, under Revenue Region 7A, received four LoAs within six months.

A complainant recounted receiving four LoAs from BIR Laoag — two for his mini-grocery and two for his eatery, despite being a small businessman striving to support his wife and their child. He had to borrow from a bank to pay the BIR.

Another scheme is the bloated or unsupported assessment. Aside from multiple LoAs, reports showed bloated tax assessments without basis.

A BIR examiner in the city of Manila allegedly offered to settle an LoA for 400,000 “all-in.”

The entrepreneur refused to pay the demanded bribe, prompting the examiner to issue an assessment of P13 million. The business reported gross sales of only P12 million before expenses, yet the assessment exceeded that amount. There was also no sufficient documentation or computation to support it.

Yet another businessman reported that his original assessment, amounting to millions, was negotiated down to P500,000. Of that amount, he was given a receipt for only 100,000; the balance went into agents’ pockets.

He became a milking cow of revenue agents as he received an LoA every year because he agreed to the settlements. The extortion became a cycle.

Seventy percent of an assessment paid by a taxpayer is pocketed by BIR personnel, and only 30 percent is receipted and goes to the government.

During negotiations, the compromise amount is predetermined. Only 20 to 30 percent goes to the government while the bigger portion is divided among examiners, supervisors, and higher-ups.

Another scheme is extortion in the guise of a compromise. A corporation in Bulacan experienced this.

According to the information Ejercito received, the tax examiner offered a lower amount for a P30-million deficiency, reducing it to P1.2 million, with 800,000 “for the boys” and 400,000 receipted. The kickback exceeded the official receipt.

Many are afraid to report to BIR offices for fear of being targeted further.

One person who emailed Ejercito about his LoA experience said there are two kinds of taxes according to the BIR. The first is “how much goes to the BIR?” And the second is “how much goes to us?”

The BIR, compared to the Department of Public Works and Highways, is a larger hub of corruption that hits Filipinos harder, as victims pass on their higher cost to consumers.