ENERGIZING THE SPIRIT OF REFORM
IN 2006, Millennium Challenge Corporation (MCC) awarded a $20.685 million Threshold Program grant to the Philippines that focused on improving revenue administration and anti-corruption efforts. The successful results of the Threshold Program resulted in the eventual Philippine Compact amounting to $54.3 million for a broadened Revenue Administration Reform Project (RARP).
The funds were allocated for two major components: further strengthening the Department of Finance’s Revenue Integrity Protection Service (RIPS) and supporting the BIR’s Revenue Administration Reform Activities (RARA).
The first focused on detecting and deterring corruption in the whole finance bureaucracy. The RIPS project covered the acquisition and customization of case management software, capacity building, as well as the digitization of approximately 3.5 million documents handled by the DOF.
Meanwhile, the RARA covered a host of projects that dealt with different aspects of reform: the Electronic Tax Information System (eTIS), the Automated Auditing Tools (AATs) and the Public Awareness Campaign (PAC). It also included the provision of an International Monetary Fund (IMF) resident advisor and relevant specialists to introduce global best practices in specialized areas. Technical assistance was also acquired from the United States Department of Treasury Office of Technical Assistance (USDTOTA) for specific needs.
“I’ve always believed that reform should be driven by the institution itself. I think that is the best practice for any reform process,” says Commissioner of Internal Revenue Kim Jacinto-Henares.
People from the field were brought in to form the Project Management Implementation Service (PMIS) with oversight on the RARP project. “Because I believed that they’re the ones who know what’s going on, what needs to be improved. And their peers will listen to them,” she adds.
Clearly, the RARP has helped energize the spirit of reform.
Reform is, of course, always an enormous challenge for any organization — and not least because there is little instant gratification and the big results may not be immediately apparent.
Still, it is encouraging that surveys on public perception show the BIR’s image improving considerably in the past years. Since receiving ratings of “very bad” from 2006 to 2009, ratings jumped 39 points in 2012 and continued to steadily advance. It has managed to reach a rating of “neutral” by 2014/2015. This improved perception of the public was directly proportional to the increase in their voluntary compliance.
Another proof is the increased registration with BIR of self-employed professionals right after BIR’s call for the payment of correct taxes through its PAC’s media advertisements. The BIR’s most compelling message was that every taxpayer, big or small, are true patriots whose contributions are needed for the country’s progress. The message has started to resonate with taxpayers.