MANILA, Philippines — Global tax policy expert Mon Abrea urged the Senate today to make business registration a gateway to growth through simpler taxes, affordable recordkeeping, fair access to government contracts and enforcement focused on material tax evasion.
Speaking before the Senate Committee on Trade, Commerce and Entrepreneurship, chaired by Senator Bam Aquino, the Asian Consulting Group (ACGlobal) founder and chief tax advisor called for reforms that help micro, small and medium enterprises survive, expand and create jobs.
Aquino acknowledged working with Abrea on several tax reform advocacies, particularly measures to help MSMEs. The senator also underscored recurring issues and complaints concerning BIR audits, noting that these had also been tackled in the Senate Blue Ribbon Committee.
“The power to tax carries the power to create or destroy,” Abrea said. “We call them the backbone of our economy. Yet we make compliance a burden they can barely carry.”
Abrea proposed an optional 10-percent flat tax for qualified micro and small enterprises, including self-employed individuals and professionals, consolidating national and local taxes specified by law.
He emphasized that the proposal requires clear eligibility, a carefully defined tax base, local government revenue sharing and safeguards for low-margin businesses. Its purpose is to reduce the overall burden of taxation and compliance while making formalization worthwhile.
He also urged government to translate the Ease of Paying Taxes framework into practical relief through simple sales-and-expense records, accessible invoicing and a standard profit-and-loss statement, replacing duplicative requirements.
“Ease of paying taxes must mean less time doing paperwork and more time growing the business,” he said.
Figures cited in his presentation showed that voluntary payments accounted for 97.55 percent of BIR collections in 2025, while preliminary and final assessments contributed 2.33 percent and delinquent accounts accounted for 0.12 percent.
While recognizing that audits also deter evasion, Abrea said these figures reinforce the importance of taxpayer services and easier voluntary compliance.
He welcomed risk-based auditing but cautioned that declining sales, low tax payments and losses can reflect genuine business hardship. Minor, good-faith errors should first receive assistance and an opportunity to correct.
Low-risk MSMEs should receive the least audit priority, he said, while enforcement should pursue material evasion, verified discrepancies and unexplained wealth through lawful investigation, regardless of wealth, office or political connection.
“No entrepreneur should have to budget for bribery as a cost of doing business,” Abrea said.
Beyond taxation, he proposed a unified registry linking DTI, BIR, SEC and local government records, with privacy safeguards. Differences between registration databases require reconciliation and should not automatically be treated as tax evasion.
Registration, he stressed, should unlock financing, business support and government contracts. He urged simpler bidding, timely payments and procurement preferences for qualified small enterprises, backed by transparent ownership and conflict-of-interest safeguards.
“Government procurement should help small businesses become medium enterprises—and medium enterprises become globally competitive companies,” he said.
For the IT-BPM sector, Abrea called for predictable cross-border tax rules, accessible treaty relief, reliable VAT refunds and modern tax administration to support investment and Filipino jobs while addressing profit shifting.
“Collect what is legally due, stop profit shifting, and give investors rules they can trust. Tax certainty is an economic policy—and a jobs policy,” he said.
Abrea urged senators to measure reform by how many enterprises register, survive and grow.
“Give small businesses room to grow, and they will give our economy more jobs, more investment and a broader tax base.”
