STOP BRIBING BIR EXAMINERS

“Even if you pay the right taxes, the Bureau of Internal Revenue (BIR) will still audit and assess you to pay more taxes.” Agree? Undeniably, this is a common sentiment among taxpayers which has resulted in lower voluntary payments.

It’s either they allocate a “budget” to compromise their tax assessments, or they get away with not paying the right taxes due to the culture of cor- ruption embedded in our tax system—where both tax collectors and taxpayers are involved.

Commissioner Caesar Dulay acknowledged the corruption in our tax system during the launch of the Seal of Honesty (SOH) Certification Program last May 31.

He thus asked the help of the taxpayers to promote a culture of integrity and honesty to fight the culture of corruption in BIR.

However, there’s more to this than meets the eye. We have an inefficient tax system due to a very narrow taxpayer base, high compliance costs and low voluntary compliance among the self-employed and professionals.

And the ongoing audit and investigation of BIR is not helping at all.

In fact, less than 2 percent of the total collections is contributed by payment of deficiency taxes from the assessment of BIR examiners.

This means that even if we stop the annual audit, as long as we encourage voluntary com- pliance especially from large taxpayers, we can collect taxes to fund the social services and infrastructure projects of the government.

Further, the BIR audits practically the same companies every year.

Ironically, their tax assessments are getting higher despite the fact that they get audited every year.

Aren’t we supposed to improve the compliance of taxpayers through audit?

As a former BIR examiner, I know exactly what happens the moment a Letter of Authority (LOA) is served to a taxpayer. It’s either they “cooperate” or they get a huge assessment.

However, the moment you start “cooperating” they keep coming back not just with higher assessment but higher bribe money while you remain noncompliant with lower voluntary compliance.

What’s the real risk? Even if they audit a company every year, if the Commissioner finds prima facie evidence of tax fraud, a company may still be subject to investigation and worst, a tax evasion case.

I agree with the Department of Finance’s estimate that we can collect at least half a billion pesos more from just improved tax administration.

However, we cannot leave everything to the government.

As we always say, if we want a better Philippines, we need to be better citizens, better taxpayers.

As responsible citizens, we need to pay