MANILA, Philippines – A tax expert believes the Bureau of Internal Revenue (BIR) should be abolished and replaced with an independent tax collection agency.
Asian Consulting Group founding chairman and chief executive officer Mon Abrea said the BIR – an attached agency of the Department of Finance – has focused too much on collecting taxes from micro, small, and medium enterprises (MSMEs) instead of pursuing delinquent corporations and politicians.
“The government is so afraid to collect from their campaign donors, from the multinational companies who are supporting their candidacy,” he said during a press conference on Thursday, March 14.
Abrea also said the BIR could benefit from becoming an independent agency, similar to the Bangko Sentral ng Pilipinas (BSP). He said such a move would allow the BIR to implement tax reforms that could spur investment in the country and crack down on tax-evading politicians and corporations.
“Maybe we have to abolish BIR and create a new agency where the head is not a presidential appointee,” he said.
The BSP enjoys the independence granted by Republic Act 7653, which states that the Philippines should maintain a “central monetary authority that shall function and operate as an independent and accountable body.” However, its governor is still a presidential appointee and is subject to confirmation by the Commission on Appointments.
Holding big firms accountable
Abrea also urged the BIR to stop auditing MSMEs and instead issue notices to violators, giving them time to register their businesses or issue receipts.
“Right now, 97% of our collection [is] still voluntary. So all the efforts of BIR running after, chasing after all the MSMEs only contribute less than 3%,” Abrea explained.
Over 99% of businesses in the Philippines are MSMEs.
Instead of going after MSMEs, Abrea urged the BIR to go after politicians and multinational corporations who do not pay the proper taxes.
“Don’t penalize them [MSMEs]. If they’re not issuing receipt, ‘oh, nasa listahan ka na namin ah. Next year pag hindi ka pa rin nag issue we will not renew your permit.’ Hindi yung i-kandado, kasuhan, and yet the big ones, they don’t get any penalty. They even run for election,” he added.
(Don’t penalize MSMEs. If they’re not issuing receipts, the BIR should say ‘You’re already on our list. If you’re still not issuing receipts by next year we will not renew your permit.’ Don’t just lock them up, file cases against them, and yet the big ones don’t get any penalty. They even run for election.)
Abrea said ordinary Filipinos can also help by boycotting big corporations that refuse to follow tax regulations such as issuing receipts.
“Because you’re paying taxes, tapos sila hindi? Hindi patas (Because you’re paying taxes, and they’re not. It’s not fair),” he said.
The BIR surpassed its collection target of P2.8 trillion in 2024, the first time it’s done so in 20 years.
BIR Commissioner Romeo Lumagui Jr. attributed this to the digitalization efforts and its crackdown on ghost receipts.
– Rappler.com