Taxwise Or Otherwise By Glacy S.
Tabirara
Posted on December 08, 2016 [ bworldonline.com ]
In an attempt to generate a greater
sense of accountability among tax officials conducting investigations and to
ensure an effective feedback mechanism for taxpayers, two new tax issuances
were recently released -- Revenue Memorandum Order Nos. 54-2016 and 61-2016.
Through RMO 54-2016, the Bureau of
Internal Revenue (BIR) created a Special Disciplinary Committee for the purpose
of investigating revenue officers over questionable tax audits and
investigations. The committee was established for the expeditious investigation
of revenue officers who failed the test of integrity, competence, and
efficiency in the performance of their audit functions or in the conduct of tax
investigations uncovered in the process of implementing Revenue Memorandum
Circular (RMC) No. 70-2016. Readers may recall that RMC 70-2016 suspended all
field audits and investigations including issuances of Letters of Authority
subject to certain exceptions. Moreover, it ordered the inventory of existing
tax investigations.
Additionally, the committee is tasked to
investigate or hear cases of erring revenue officers as may be assigned by the
Commissioner.
In the exercise of due process, a
preliminary investigation will be conducted at the outset and will be triggered
by the issuance of the Commissioner of a Notice/Memorandum to Explain to the
revenue officer under investigation. The latter is given three days to submit a
written explanation why no administrative case should be filed against him.
Failure to submit a written explanation shall be considered a waiver of his
right to do so and the preliminary investigation may ensue and be completed
even without such explanation.
If the committee finds it necessary, it
may summon the concerned revenue officer to a conference where questions may be
propounded to further clarify the complaint against him. Within five days from
the termination of the preliminary investigation, the committee shall submit an
investigation report containing its recommendation and complete records to the
Commissioner. The Commissioner will then decide whether there exists a prima
facie case to warrant the issuance of a formal charge.
If the Commissioner issues a formal
charge, the revenue officer shall be required to submit an answer within five
days from receipt of the formal charge. Failure to do so will be considered as
a waiver on the part of the revenue officer, and the case shall be decided
based on available records. Immediately after the submission of the answer, a
formal investigation/hearing shall be held within five to 10 days from receipt
of the answer, or upon expiration of the five-day period to submit an answer.
No motion for postponement shall be entertained to avoid any delays in the
proceedings.
The Committee, acting as a collegial
body, shall submit a written report of the investigation to the Commissioner
for approval. The Commissioner has 15 days to review and decide whether to
approve the Committee’s recommendation, in whole or in part. The aggrieved
party may file a motion for reconsideration of the Commissioner’s decision
within five days from receipt. If denied, the revenue officer may appeal to the
appropriate administrative or judicial body or tribunal within the reglementary
period, as may be allowed under existing rules and regulations.
While the creation of the committee will
give taxpayers and other stakeholders a venue to air their grievances and
uphold their right to due process, there should be measures to ensure that
complaints are valid and will not be used to fabricate false or malicious
charges against tax officials.
The second issuance (RMO 61-2016)
establishes the standard taxpayer feedback system in compliance with the
Anti-Red Tape Act of 2007. The feedback system will also be used as a tool to
gather information on the performance of the BIR officials in the delivery of
frontline services which will serve as part of the evaluation of Revenue
District Offices. It will also be used to provide inputs to BIR top management
on the level of taxpayer satisfaction, their issues and concerns, and to
resolve these matters. The feedback system also aims to develop the
service-oriented image of the BIR.
How does the feedback system work?
Traditional customer feedback mechanisms, such as the drop box and survey form,
will be utilized in obtaining information from the taxpayers. A Customer Survey
Form (CSF) shall be given to the taxpayer together with their queue number
slip. Taxpayers will be reminded to accomplish the survey form at the end of
their transactions and to drop the form in the drop box. The survey form should
contain the name of the revenue officer who served the taxpayer, the queuing
reference number, as well as the type of transaction availed.
In addition, there will be monitoring of
compliance through unannounced auditor’s visits which shall include retrieval
of the CSFs. The visiting auditor shall accomplish the “Standard Taxpayer
Feedback System” report. The Client Support Services group through the Taxpayer
Service Programs and Monitoring Division of the BIR shall collate and
consolidate submitted reports from designated auditors and prepare a final
report with data and analysis to the Commissioner or the Management Committee
on a quarterly basis.
The value of the feedback system must
not be underestimated as it is a powerful tool not only in measuring
performance but also in identifying process improvements, including the root
cause of issues, and in formulating solutions.
It is apparent that the two new
issuances are aligned with the present administration’s drive toward restoring
public confidence and trust in the government and establishing a more
responsive public service through efficient and effective front liners. Based
on the time-honored principle that a public office is a public trust, every
government employee should serve with responsibility, integrity, and
accountability.
Although the administrative measures
might not swiftly put a stop to questionable tax practices in our country,
there is a renewed optimism that the efforts to cleanse state bureaucracy will
eventually generate genuine transformation, hopefully anchored on real cultural
change.
Taxpayers should do their share in
ensuring that there is zero tolerance for corruption. Integrity should be
maintained at all levels of society even at the level of corporate governance.
It should not be integrity by convenience; it should be observed at all times
in all dealings with the government and its personnel. The taxpayer’s
perception of the BIR, as seriously flawed with corruption, must radically
change.
With progress towards transparency,
accountability and integrity, government will be better equipped to collect
taxes and to pass structural reforms.
Real change extends beyond palliative
measures to curb corruption. It should start with a corrupt-free culture in the
BIR and then reinforced by the cooperation of all stakeholders in ensuring that
transactions with the BIR are above board. Only through a robust tripartite
partnership between the state, revenue officials and taxpayers can real change
be actualized.
The views or opinions presented in this
article are solely those of the author and do not necessarily represent those
of Isla Lipana & Co. The firm will not accept any liability arising from
the article.
Glacy S. Tabirara a manager belonging to
the tax services department of Isla Lipana & Co., the Philippine member
firm of the PwC network.
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