BIR chief: Tax transparency to help Philippines rake in revenues

CEBU, Philippines – Promoting tax transparency will help the country generate more revenues and therefore support fund its development goals, the chief of the Bureau of Internal Revenue (BIR) said.

Internal Revenue Commissioner Kim Jacinto-Henares said that financial transparency which includes tax transparency is a long-term and global agenda.

Henares explained that transparency in taxation wants to go after companies and other taxpayers that do not pay the correct amount of taxes.

"I don't think the country can depend on ODA (official development assistance) that much because every economy has its own problems already. So the concern of everyone is really transparency -- transparency in taxes -- so you generate revenue," Henares said in a recent interview.

The Philippines is a major recipient of ODA loans that support its development projects especially in infrastructure. Among its ODA sources are the World Bank (WB), Japan International Cooperation Agency (JICA) and Asian Development Bank (ADB).

Henares believed the country can do so much in generating more revenues internally to fund its projects and not just depend much on ODA.

She said the country needs to generate more revenues to support various sectors especially infrastructure.

"One of our weaknesses is infrastructure," the tax chief stressed.

The BIR official further suggested the Philippines should sustain its advantage in human resource and that investing in education is important.

"A healthy and educated workforce will attract more high-value investments," she added.

Support

Moreover, according to the BIR chief, the idea of tax transparency is being supported by some international organizations such as the United Nations (UN) and Organization for Economic Cooperation and Development (OECD).

The Department of Finance (DoF) said tax authorities especially of a developing country like the Philippines face serious challenges in enforcing laws and collecting taxes from cross-border transactions. "In a 2014 report, Global Financial Integrity estimates that the Philippine government has lost at least US$23 billion tax revenues since 1990 from trade mis-invoicing," the DoF said in a previous statement.

Today the trend for developing countries like the Philippines is implementing global standards on tax transparency and fairness.

It was late last year when the UN appointed Henares as a member of the UN Committee of Experts on International Cooperation in Tax Matters.

The committee is responsible for finding ways and means of facilitating the conclusion of tax treaties among developed and developing countries and for promoting international tax cooperation among tax authorities.