Tax Reform for Acceleration and Inclusion (TRAIN) law is part of the comprehensive tax reform program of the Duterte Administration to make our tax system simpler, fairer and more efficient.
But it seems others are taking it differently.
They waited for the TRAIN but didn’t ride when it arrived–business as usual–as they continue to negotiate, compromise, and bribe examiners, thinking that it is cheaper and a more convenient way to deal with taxes.
For more than ten years now, we have been advocating for a genuine tax reform.
In our nationwide tax roadshows which started five years ago through the Center for Strategic Reforms of the Philippines (CSR Philippines), and now in partnership with the Bureau of Internal Revenue (BIR) and the Department of Trade and Industry (DTI), we continue to promote tax education & reform, as well as entrepreneurship most especially among our youth to teach them to uphold integrity and honesty in doing business especially in paying taxes.
In various fora and conferences, I have presented the blueprint of genuine tax reform which focuses on three strategic areas that we need to reform: tax laws (legislation), tax administration (administrative) and taxpayers (compliance).
TRAIN provides a lower personal income tax–a gradual shift from an income-based taxation to a consumption-based taxation. But in order to sustain this reform without compromising tax collections, we need to continue to broaden taxpayer base and increase voluntary compliance.
While the BIR continues to streamline and automate its processes, taxpayers must commit to pay their taxes correctly and on time. We cannot leave everything to the government.
Governance is a shared responsibility. We believe that. And it’s true.
As a former BIR examiner, I know exactly what happens when a taxpayer negotiates to lower its tax assessment in exchange for bribe money.
Under the previous administration, we all complained about the unreasonably strict and inconsiderate tax rules and regulations which forced most of the taxpayers to get help from our “friendly examiners.”
This changed abruptly when President Duterte appointed Atty. Caesar “Billy” Dulay as the Commissioner of Internal Revenue.
He may not be a familiar name among revenue officials and tax practitioners, but he surprised everyone when he suspended the tax audit and investigation during his first three months, and reversed rulings & regulations to streamline tax compliance and encourage voluntary payments among others.
However, this seems not enough for some of us who continue to complain that corruption in BIR still exists and examiners still continue to harass taxpayers.
We want change but not all of us are willing to change.
We want to enjoy a tax-free lifestyle–but it doesn’t mean not paying our taxes which is our contribution to nation-building. A tax-free lifestyle is being free from the unnecessary burden of taxes due to penalties and compromises.
Unfortunately, some of us call the BIR examiners corrupt but do not consider ourselves as tax evaders when we refuse to declare our true profit and pay the right taxes.
Since we launched the Seal of Honesty (SOH) Certification Program last May 31, 2017, we have been receiving a lot of horror stories describing their encounters with BIR examiners but only a few are committed to go through tax planning to improve their compliance and pay the right taxes.
Here are my suggestions:
If your accountant recommends paying bribe money to examiners, fire your accountant.
If an examiner extorts money from you, file a complaint to the Ombudsman or write a letter directly to Commissioner Dulay.
If you want to save millions of pesos from unnecessary penalties and compromises, undergo Citizen Tax Planning (CTP) which includes comprehensive tax audit, expert tax advisory, express tax solution and assistance, and monthly tax compliance review to help you pay the right taxes. For inquiries, send your e-mail to firstname.lastname@example.org.
If you want to stop BIR audit, apply for the Seal of Honesty (SOH) Certification Program. Visit www.sealofhonesty.ph for more information.
Together, let’s uphold integrity and honesty in doing business and in paying taxes in our country!