Good governance plays a key role in supporting the execution of the strategy of any organization. It is, thus, the principal role of the leader to set the tone from the top by embedding good governance policies, procedure and processes throughout the organization and by letting the message across.
In my view, and true to the administration’s mantra that “change is coming,” the current chief of the Bureau of Internal Revenue (BIR)has made changes that signal his strong commitment to improving governance in the agency from the time he assumed the position.
His priorities are very clear. To start with, he announced that one of the BIR’s important objectives is to provide world-class frontline services to its constituents – the taxpayers. Giving importance to this essential level of customer satisfaction, and also as an effective way of gathering inputs for BIR top management on the issues and concerns of the taxpayers, he instructed all offices of the agency to implement a standard taxpayer feedback system to evaluate the efficiency of the services provided.
Without even looking at the survey results, we can surmise that a preponderance of the complaints will pertain to the tedious and complex process involved in obtaining permits or certifications from the BIR, the numerous documentary requirements that are expected to be submitted and, quite often, the arbitrary, if not capricious, decisions made by tax officers. Such concerns have been raised, time and again, in several public forums and openly complained about in the news and social media.
Recent actions taken by the BIR chief showed that he is listening and, indeed, taking concrete action to address the concerns of the taxpayers. And I believe that due recognition should be given for these positive changes.
One of the well-received changes is the decision to allow the certificates of zonal values of real properties to be obtained from the revenue district offices. Before this, taxpayers already complained about the inconvenience of securing the certificates from the national office, regardless of where the taxpayer was located. This resulted in delays in the processing of tax clearance certificates related to estate, donor and capital gains tax payments.
On the other hand, the new policy to streamline the process and issuance of the certificate of tax exemption and electronic certificate authorizing registration (CAR) on the transfer of raw land intended for socialized housing projects will surely improve the level of taxpayer services, especially for the underprivileged in our society. Under the new simplified procedures, the requirements for the CAR are very specific and remove any discretion on the part of the processing tax office to demand additional documents, a matter that caused delays and confusion in the past. In addition to expediting taxpayer transaction within the bureau, this policy change will help address backlogs in the implementation of government housing programs.
Finally, the BIR chief also devolved to the revenue district offices or the appropriate large taxpayer office, where the taxpayer is registered, the processing of requests for tax exemption of separation benefits received by an employee as a consequence of separation from employment due to other causes beyond the employee’s control (other than death, sickness or physical disability), such as, but not limited to, retrenchment, redundancy, installation of labor-saving devices and closure of business. Before this, the processing of this type of requests was centralized with the BIR Law and Legislative Division in the National Office, which was among the reasons for delays in the issuance of rulings, and consequently, of the payment of the tax-exempt benefits to the separated employee.
The move of the BIR chief to establish a special disciplinary committee to investigate or hear the cases of revenue officials and employees who have been asked to submit or have already submitted written explanations regarding what appeared to be violations or substantial lapses, or departure from existing revenue issuances in the conduct of tax audit or tax investigations, establishes accountability on actions made by these tax officers. Likewise, his reiteration on the observance to the documentary requirements and the prescribed period for processing requests, filed with the BIR, clearly sets his commitment for the agency to adhere to the rules that it has set.
All of these actions show that the BIR chief has a clear understanding that the agency’s tax collection role and efficient taxpayer service are complementary; one does not have to be sacrificed in order to achieve the other.
Good governance is about designing an approach that provides enough checks and balances for accountability but without diminishing the ability of the leadership to take the action needed to deliver. It is about ensuring that systems and procedures are in place to prevent mismanagement and fraud, while encouraging consistency in behaviors, effective transparency and innovation.
From where I sit, the new BIR chief is on the right path. Thank you for listening, Mr. Commissioner.
Maria Victoria Espano is the Chairperson and CEO of P&A Grant Thornton. P&A Grant Thornton is one of the leading Audit, Tax, Advisory, and Outsourcing firm in the Philippines, with 21 Partners and over 800 staff members.
MARIA VICTORIA ESPAÑO