The Philippine Tax Whiz Mon Abrea held a roundtable discussion with the United Print Media Group (UPMG) on Friday, November 9. The event was held at the office of the Philippine Daily Inquirer in Makati.
Attended by various members of UPMG, the prominent tax advocate discussed the state and necessity of the ongoing tax reform. Abrea discussed the inefficiency of the country’s tax system and the high tax rates plaguing the country.
In his presentation, Abrea noted that there were only 19.26 million registered taxpayers despite having a population of 106 million. Of these taxpayers, 84.8% are compensation income earners.
To the Philippine Tax Whiz, the country needs to encourage more sole proprietors and professionals in paying their taxes. As of 2018, they only amounted to 13.14% and 2.08% of the registered taxpayers respectively.
The solution to this, according to the tax reform advocate, is administrative reforms.
In October 2018, the tax expert wrote an open letter to legislators and later, to President Duterte. The letters contained the advocate’s proposal for reforms to the tax administration. The letter also covered his support for the lifting of the excise tax on fuel.
Abrea supported the suspension of the excise tax on fuel but recognized that more needed to be done. High tax rates were not the only way to improve revenue collections.
He proposed improving the tax administration by modernizing the system and making electronic compliance the default method of doing so.
According to the Philippine Tax Whiz, alternative sources of revenue collections can come from a tax amnesty, broadening the taxpayer base, and ending corruption.
Specifically, he pointed out the need to implement a risk-based BIR audit. As it is, under the current system, the same taxpayers are audited again and again.
Corrupt examiners often take advantage of this system to harass taxpayers.
If you are being troubled by the BIR audit, you may want to learn the process and the different ways of invalidating them. The Asian Consulting Group holds Executive Tax Briefings to guide taxpayers on how to get rid of the BIR Audit.