#AskTheTaxWhiz: Advice for Duterte’s first 100 days

Dear Mr. Tax Whiz,

If you were to advise president-elect President Duterte on how to push genuine comprehensive tax reform in his first 100 days, what are the top 3 priorities he needs to consider? 

You are obviously the most prominent and credible tax advocate in the Philippines.

Given the chance, will you accept an appointment as Bureau of Internal Revenue (BIR) commissioner? If not, who will you recommend? How about Bureau of Customs (BOC) commissioner? 

Will you propose privatization of BIR and BOC? How about tax amnesty?

Assuming you get appointed as BIR commissioner, what are your top priorities to eliminate corruption and to increase voluntary payment?

Lastly, what can we do as citizens to make sure we push for a genuine comprehensive tax reform? 

Looking forward to a simple, fair and equitable tax system under the Duterte administration! If he decides to form the Tax Reform Commission as you have also suggested, you should definitely be part of it.

 Baste 

 ***

 Dear Baste,

The first 100 days of president-elect Duterte is very critical as he has to appoint his Cabinet secretaries and commissioners.

I can already imagine the number of friends, schoolmates, classmates, or even housemates that have given their unsolicited advice to the incoming 16th president of the Philippines. 

Nonetheless, I will give a direct and brief answer to at least remind him and his transition team to prioritize tax reform in his first 100 days. 

First, he needs to appoint good and honest commissioners in the BIR and BOC who will lead the tax administration reform agenda in their respective agencies.

Second, he should consider creating a Tax Reform Commission composed of multi-sectoral groups who will handle the overhauling of our tax system.

He should not leave it with the Department of Finance or BIR, as you know what happened in the past 30 years. 

Lastly, unburden the ordinary employees especially the middle income earners who have been contributing at least 20% of the total revenue collections.

Lower income taxes whether through indexing it to inflation or benchmarking it with ASEAN taxation. But definitely, there’s no acceptable reason to delay or study it further.

Will I accept an appointment? No, I will be of great help working with, but not in, the BIR and with our legislators as a tax advocate in reforming our tax system. 

I would recommend Deputy Commissioner Nelson Aspe or Regional Director Alfredo Misajon as BIR commissioner, and Deputy Commissioner Agaton Teodoro Uvero as BOC commissioner. 

Regarding privatization, definitely yes, but it might take awhile so at least full autonomy and flexibility in managing its personnel and financial resources, similar to IRAS of Singapore.

Regarding amnesty, yes but as part of the comprehensive tax reform. And if possible, to prioritize amnesty of estate taxes to transfer land titles from the ancestors to the children of our poor farmers.

If I were BIR commissioner? I get this a lot. Honestly speaking, it’s easy to recommend but to be BIR commissioner is different. But just to answer your question, I would probably suspend tax audit for a year and ask all examiners to assist instead all taxpayers so they can comply and pay the right taxes without the fear of penalties and compromise.

I would push for full automation of BIR, and streamlining of all processes.

Lastly, I would probably ask all BIR employees to resign if they cannot promise to stop corrupt practices including, but not limited to, accepting bribes or extorting money during tax audit, which we all know happens. 

Thank you, Baste, for your trust and confidence. We also have to give it to president-elect Duterte, and to those he will appoint in various government agencies, including the BIR and the BOC. 

Let’s all be good citizens by paying our taxes correctly, asking for official receipts in all our purchases, and report to the BIR those who are not registered and not paying the right taxes. 

With every good wish, I am,

Tax Whiz 

 

Got a question about taxes? #AskTheTaxWhiz! Tweet @rapplerdotcom or email us at business@rappler.com. – Rappler.com

Mon Abrea is a former BIR examiner and an advocate of genuine tax reform. He serves as chief strategy officer of the country’s first social consulting enterprise, the Abrea Consulting Group, which offers strategic finance and tax advisory services to businesses and professionals. Mon’s tax handbook, Got a Question About Taxes? Ask the Tax Whiz!, is now available in bookstores nationwide.

Follow Mon on Twitter: @askthetaxwhiz or visit his group’s Facebook page. You may also email him at consult@acg.ph.