POLICY PROPOSAL TO FURTHER STRENGTHEN LOCAL FISCAL CAPABILITIES
Optimal Revenue Administration
Over the decades, the Philippines has suffered from persistent fiscal imbalances, resulting in consistently low delivery of public services such as infrastructure, education and health among others and up to this time we continue to borrow money from other countries just to compensate with a very low revenue collection. Our foreign debts continue to eat up our budget (comprising 19% or ___ billion pesos) leading us to a more poverty situation. One best fiscal policy that is worth much attention of our government leaders is Revenue Administration. One main source of this is efficient taxation. In the light of the current fiscal crisis, it is very important for the Bureau of Internal Revenue (BIR) to restudy its tax administration strategies as it is faced with the challenge of balancing between taxpayers rights and meeting its collection goals. Among the following are proposals for effective and efficient revenue administration:
1. Develop Reforms in the BIR through information systems
Computer engineering actually was already started in the BIR with its Electronic Tax Information System (ETIS), Automated Excise Declaration & Management System, and Automated Auditing Tools (AATS).
ETIS will reengineer and computerize the business processes of BIR to enhance tax administration through full operational efficiency. Its goal is to modernize BIR and provide an enhanced tax administration system that can be fully utilized by the agency nationwide. This will increase operational efficiency in registering taxpayers, processing tax returns and accounting payments.
AATS on the other hand, are computer software and hardware for the conduct of computer-assisted audits which promote proper taxpayer compliance in filing and paying taxes. It will make possible the maintenance and submission by large taxpayers of tax records in digital form. Tax auditing tools have demonstrated their revenue-raising potential, reduced by half the number of days it takes to complete a tax audit and removed taxpayer concern about fairness of tax audits that are based on sampling rather than a review of all transactions. The reduction in man days per tax audit will help BIR reduce its backlog of unfinished audits, promote taxpayer satisfaction and ultimately leads to increased revenue collection.
The computerization of BIR business processes will enhance the trust of the taxpayers to the bureau. This, in turn, will improve tax compliance monitoring, reduce client contact and opportunities for negotiated assessments, increase the detection of misreporting and enhance the value of reports. Improved compliance, audit and enforcement tools will contribute to a sustainable program of tax administration leading to increased tax revenue collection.
2. Intensified enforcement of revenue laws and regulations
The government is very lenient with tax evaders. If we come to analyze our situation, only those evaders which are not allied to the present administration are the ones being subjected to punishment. Because of this lack of strict enforcement on revenue laws and regulations, taxpayers are not afraid to defy regulations. One of the reasons for the lack of trust of the people to the BIR is the alledged graft and corruption in the Bureau. Since BIR examiners have direct access to taxpayers and have the power to manipulate tax computations, under the table transactions may occur as the taxpayer would negotiate with the examiner to lessen its tax due.
3. Enhancing the Morale of BIR Examiners and Employees
This could be done through adequate salary and enjoyable benefits. This would foster loyalty to the government and would inculcate values that would lessen graft and corrupt practices. It is noteworthy too that the bureau does not have adequate employees to man their tasks. This is not economically helpful as it would create...
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