Why is the lifestyle set now afraid to wear jewelry–before Kim Henares? | Lifestyle.INQ

OCTOBER 27, 2022

The story goes how guests in a posh party immediately tucked their expensive jewelry inside pockets and purses when word spread that Internal Revenue Commissioner Kim Jacinto-Henares was about to arrive.

 

And when she did arrive and took her seat, the other guests were reluctant to sit beside her. The party host was also noticeably trying to cover the glittery luxury watch he had on.

 

Jewelry has always been a reliable indicator of wealth. In the lifestyle circle, paring down the baubles has become the new black, as fashionspeak goes, now that Henares has shown how serious she is in her job.

 

“If you flaunt (jewelry), you call attention,” she noted in an exclusive interview with Inquirer Lifestyle.

 

Henares admits she looks out for telltale metals, especially when the Bureau of Internal Revenue (BIR) receives information that a specific individual is not paying the proper taxes.

 

Given this, Henares has made it part of her job description to scour lifestyle magazines to connect names with individual tax returns. If the luxurious face and his or her taxes don’t match…

 

But Henares hastens to add that wearing jewelry is no crime. She makes it clear “there’s nothing wrong to flaunt and to be rich. I want everyone to be rich as long as (they) pay the right taxes.”

 

PR nightmare

 

The tax woman has not only become one of the most visible officials of the administration. After locking horns with the likes of Philippine Medical Association (PMA) president Dr. Leo Olarte and boxing superstar Manny Pacquiao, Henares has also found herself in the limelight for reasons that many would consider a public relations nightmare.

 

Olarte cried foul over the BIR’s series of advertisements that saw print on March 2, specifically the one showing a female doctor piggybacking a female teacher.

 

The half-page ad said the doctor earned more than P1.075 million in a year but only paid P7,424 for the same period. The teacher earned more than P850,000 and paid P221,000 in taxes.

 

The BIR’s message was clear: “When you don’t pay your taxes, you’re a burden to those who do. Do your share.”

 

Olarte held a press conference the day the ad came out and called it “absolutely unfair” for its portrayal of doctors as “tax cheats.”

 

That the BIR accused Olarte of nonpayment of P2.93 million in taxes a few weeks later only added fuel to the furor.

 

Henares remains unfazed and simply flashed a smile when asked about the PMA brouhaha.

 

“What we’re really trying to do is talk to the people on top, making them realize that what they are paying (in taxes) is unreasonably low,” she explained.

 

Henares also makes it clear there is no witch hunt involved.

 

Faced with an average of P400 billion lost yearly to tax evasion, it was actually the Department of Finance’s (DOF) idea to strengthen tax collection efforts and help reform the BIR.

 

“Those infomercials that started in October where hotels, motels and lechon (sellers) were named (as those paying deficient taxes)… the DOF was the one that conceptualized that,” Henares explained.

 

While the finance department names the sector or group that needs to be reminded about proper tax payments, the BIR  provides  data to back up the DOF’s concepts.

 

“They ask data from us, we give the data and they do the creative (ads). Then they have the data approved by us, kung tama, then we approve (these) and place the ads,” Henares added.

 

Efforts to reinforce tax collection in the country are part of the government’s Revenue Administration Reform Program under the US-backed Millennium Challenge Corp. (MCC). The MCC provided $50 million to fund good governance projects in the Philippines.

 

Name-and-shame

 

Henares said the MCC had provided a component for a public awareness campaign.  This includes the BIR ads running on a name-and-shame platform.

 

“The Filipino psyche is that people do things because they are embarrassed or because they are afraid. So this ad is more (about) embarrassment psyche. The ‘afraid’ psyche is the Run After Tax Evaders (RATE) program,” she pointed out.

 

Henares, who has been BIR chief since the early weeks of the Aquino administration and deputy commissioner from 2003 to 2005, said the agency is tired of its milder approach in convincing taxpayers to do the right thing.

 

“Eh, 100 years na kaming nakikiusap, wala pa ring nangyayari. Hindi naman ibig sabihing lumabas na ‘yung dalawang campaigns (‘shame’ and ‘fear’) nawala na ‘yung pakikiusap,” she stressed.

 

“Nandun pa rin, kaya lang dinagdagan na ng ibang ingredient aside from pakikiusap—to embarrass people (to force them) to do what they should be doing in the first place and to instill fear,” Henares added.

 

“If they don’t do what they should be doing, there is a consequence,” she also warned.

 

Now, whether the BIR’s blitzkrieg is effective would be known after the April 15 deadline for the filing of income tax returns.

 

“We will find out, the day of reckoning is arriving,” Henares said with a laugh.

 

The BIR boss said she does not understand where Olarte’s outrage comes from.

 

“In the first place, I was not talking to doctors in a specific sector, but to a type of taxpayer who does not pay correctly,” she explained.

 

There were doctors who texted her expressing their agreement with the BIR’s observation.

 

Unfortunate coincidence

 

Henares theorized that Olarte blew his top because the release of the ads coincided with an election of officers within the PMA.

 

“The unfortunate thing was the timing because it came out when the PMA was going through an election, on March 16,” she said.

 

“I have recognized in life that in everything you do, there would be people who agree with you and those who would disagree,” she mused.

 

“If you wait for a unanimous decision, you would not be able to do anything. So you will always be static, neither here nor there,” the tax woman added.

 

So what about the timing of the tax evasion case against Dr. Olarte?

 

“Bago nilabas ‘yung ad, iniimbestigahan na namin siya.  Kaya nung nagreklamo siya, natatawa ako kaya lang hindi naman ako puwedeng magsalita,” Henares said.

 

“We’re all professionals.  What I’m doing is based on facts, on evidence. At the time he was complaining, even if I wanted to say ‘look who’s talking,’ I cannot do that. If I were interested in retaliation (for what he said), I could have filed (a case) earlier,” she added.

 

Henares would also invoke professionalism in saying she is not afraid of going to any doctor for a checkup. That is, in case she needs to see one.

 

“I don’t see doctors regularly because I’m not sick,” she said.

 

Pacquiao’s case

 

In the case of Pacquiao, previous reports said the BIR had demanded that the world’s sixth highest-paid athlete pay P2.2 billion, including interest and surcharges, for unpaid taxes in 2008 and 2009.

 

Forbes Magazine pegged his earnings for that period at $34 million.

 

Henares clarified that the BIR would no longer demand that Pacquiao pay taxes for earnings already taxed abroad “kung tama ang reporting.” However, he must provide documentation that he already did, she insisted.

 

Henares’ office had been waiting for the past “two to three years” for the congressman of Sarangani province to submit evidence that he had paid the proper taxes, if he had done so abroad.

 

“As a general rule, a Filipino resident’s global income is taxed in the Philippines. If you earn in America, China, Australia, Hong Kong or Singapore, you have to report all your income (earned abroad to) the Philippines. You have to (add up all those earnings) in your gross income (statement),” Henares explained.

 

She acknowledged that there are cases where the Philippines has forged a tax treaty with another country where a Filipino earned money, so anyone who pays there would no longer pay the same here.

 

Henares pointed out that Pacquiao simply has to submit the tax returns reflecting these payments. The BIR cannot simply rely on his public statements that he already did.

 

“Ang problema kay Manny Pacquiao, hindi niya dineklara ‘yung total income n’ya globally, tapos hindi rin siya kumuha ng creditable withholding tax certificate at wala din siyang na-claim na may binayaran siya sa ibang bansa,” Henares said.

 

It is for this reason Pacquiao is being audited by the BIR.

 

“We cannot give him any tax deduction because it is not anywhere (stated) that he paid anyone… He also did not show any proof he paid any foreign government. So the (P2.2-billion) assessment is based on (his supposed) gross income,” Henares said.

 

The BIR chief recalled that Pacquiao, in a news conference, waved a piece of paper, purportedly an IRS form, indicating the taxes he paid to the US government.

 

Henares noted that Pacquiao “blackened out certain numbers so it is no longer the proper document. It is already tampered.”

 

Were Pacquiao brandishing proof that he paid taxes in the US, the proper procedure is for him to have his document “consularized” by the US embassy in Manila and then submit it to the BIR.

 

A consularized document, she explained, would bear a ribbon “indicating it’s an official document and it should have no erasure.”

 

“Unless we receive the proper form, (the BIR) has nothing to evaluate,” Henares said. So far, Pacquiao has yet to be charged with a tax-related offense.

 

Day of dread

 

Thursday is a day of dread among tax evaders because it’s when Henares bares the latest culprit the BIR is filing a case against as part of its RATE program.

 

The BIR chief said evasion cases bared to media are carefully studied. And no one is safe. Not the one who irritates her, more so “somebody who makes me sipsip.”

 

“If you’re paying the right taxes, there’s nothing to fear.  And I’m not shaming the people who pay the right taxes. I’m  talking only to the people who don’t pay the right taxes,” she maintained.

 

The BIR detects tax cheats through a system that involves more than a cursory check of the lifestyle pages. Payments of value-added taxes (VAT) are thoroughly examined. VAT payments reported by both seller and buyer must match.

 

“If there is a discrepancy, there is something wrong.  That’s one source of investigation,” Henares said.

 

Customs data, government contracts and withholding taxes of businesses also provide a rich trove of information. If tax cheats paint her as a bogeyman, does that mean the country has finally found its ideal collector?

 

“If based on the 10 credit upgrades the Philippines has had so far, I would think (the BIR) is effective, but there’s still a lot of things we have to do.  The credit upgrade is just pasang-awa,” Henares observed.

 

A government’s tax collection effort greatly affects its perceived ability to pay back foreign debts.

 

A check with www.tradingeconomics.com showed that Standard and Poor’s had given the Philippines a credit rating of BBB+ (stable); Moody’s gave a score of BAA3 (positive) while Fitch’s records reflected a BBB- (stable).

 

“Hindi naman tayo satisfied with just pasang-awa. You want to go up the ladder,” she said.

 

Everything begins with the payment of proper taxes. “Ang hindi nagbabayad ng tama ay dapat magbayad ng tama,” she insisted.

 

It may seem strange that for a public official who may have already earned enemies at this point, Henares said she has yet to become the target of any intimidating act.

 

“I dunno whether that’s good or bad,” she said.

 

What does her family say?

 

Husband Daniel, who has two children from a previous marriage, “fully supports” Henares’ aggressive tax collection campaign.

 

“As much as possible after work, I don’t discuss my job. Not even with my husband, although he asks, ‘Who are you going to file a case (against) on Thursday?’ I answer, ‘Wait and see.’ He’s curious, but the answer to him is like (my reply to) everyone else. Wait for the press conference,” Henares said.

 

Seeming closeness

 

Some observers note her seeming closeness to President Aquino, to which she replied that they met only in September 2009 when his supporters were gearing up for 2010 and consulted her about policy. Henares had already worked in the BIR then, from 2003 to 2005 as deputy commissioner.

 

“Siyempre you’re campaigning and you should be able to talk about everything—all the departments, agriculture, mining, the environment. Social work, defense, security, peace and order, revenue, debt, lahat.  That’s when we did research and we (told) him, ‘These are the best practices.’ From there, he culled his own point of view, kung anong magiging policy n’ya,” Henares recalled.

 

Which means the tax woman is a relative newbie in the President’s power circle.

 

Henares dismissed comments that since she also engages in target practice, she must be part of the “kabarilan” clique in the supposedly multitiered circle of Mr. Aquino’s friends.

 

“I started shooting only in February 2011 when I became commissioner and some security men were assigned to me. I only picked up shooting as, I said, since my security men have guns, in case something happens I should know how to shoot their gun.”

 

The President was not even aware that she had already taken target practice sessions.

 

“He found out I was learning how to shoot and he said, ‘Why don’t you come and I’ll teach you,’” she said.

 

Henares said she would not be disturbed by whispers most likely triggered by jealousy.

 

“Wala ka namang magagawa. ‘Yun ang mga things na hindi mo na pinapansin, maski ano naman sabihin mo… It should not bother me. As far as I’m concerned, if you’re a friend, wala kaming problema kung magkaibigan, barkada or classmates basta pinipili sa qualification,” she explained.

 

“Kung tutuusin, ikaw ang nakakaalam kung talagang qualified ka… In 2009, I was with World Bank (as a senior private sector development specialist). I was BIR deputy commissioner from 2003 to 2005. I was also (Board of Investments) governor in 2003. I had the perspective of trade which is attracting investment and tax,” she concluded.

 

 

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