Disruption in taxation

Nothing is certain but death and taxes, while the only constant is change.
Who doesn’t know that? And yet, it still hurts like the first time. This applies to both government and business sector when it comes to adopting change, integrating technology at the very core of government service or business, and preparing for, if not initiating, disruption even in taxation.
Either we be ahead or be left behind. As they say, creativity is thinking up new things, while innovation is doing new things. We need to think fast and act faster if we don’t want to be left behind.
For business, this means paying more taxes or facing death early. If you’re not growing your business, making more profit, and paying higher taxes, then your business must be dying.
If you’re under-declaring your assets or income and not paying the right taxes, don’t be surprised if your accountants and lawyers become richer than you as you taught them how to.
For government, this means collecting more taxes especially from the online world and making every taxpayer see and feel where their taxes are going — more infrastructure, better public transport system, education and social services, among others funded by taxpayers’ money.
If everything is being automated except government transactions, then it loses its moral ascendancy and credibility to govern and regulate economic activities.
If e-commerce is able to secure information and payment without going through the bureaucratic process of submitting forms and paying over-the-counter, then the government loses its revenues to fixers and corruptors.
When it comes to taxation, e-commerce remains a challenge in terms of regulation and collection of taxes especially with the increasing number of online transactions, virtual offices and employees, and new apps and technology being developed every day which are making the status quo irrelevant.
Technology has indeed changed how we do everything.
In fact, technology is a key element in pushing for a genuine tax reform — a simpler, fairer and more efficient tax system!
Prior to the implementation of the Tax Reform for Acceleration and Inclusion (TRAIN) law, we were all victims of the outdated and burdensome tax system. The Bureau of Internal Revenue (BIR) introduced the eBIRForm system along with other administrative reforms, including streamlining and computerization projects in the tax administration.
However, the narrow taxpayer base and low voluntary compliance, especially among self-employed and professionals, remain a challenge.
Based on the 2016 BIR Annual Report, we currently have 17,919,087 individual taxpayers: 15,176,959 (84.7%) of whom are the compensation income earners, 334,829 (1.87%) are professionals, 2,350,490 (13.11%) are sole proprietors, and 56,809 (0.32%) are Overseas Filipino Workers or Non-Resident Citizens.
Considering the total population of the Philippines last 2016 at around 104 million, we can deduce that we have a very narrow taxpayer base. In fact, we have more than 4 million licensed professionals and more than 60,000 lawyers but we only have 334,829 registered professionals.
What’s worse is that not all are compliant.
More than half are not declaring income or paying any taxes while employees continue to accept their paycheck net of withholding tax on compensation contributing 82% of the total income tax collection from individuals.
Therefore, there is really a very low voluntary compliance among the self-employed and professionals (SEPs) registered with BIR while a significant number remains unregistered.
Governance is a shared responsibility. Our country is everyone’s business. We need to think and feel for our people, our government on how best we can distribute wealth, protect the poor while enjoying profit from our businesses or profession.
In our social enterprise, the Asian Consulting Group (ACG), we are committed to help individuals and companies pay the right taxes without penalties and compromises as our game-changing strategy through Citizen Tax Planning (CTP).
After years of promoting our tax advocacy and helping more taxpayers, we realized there are more tax questions every minute via social media, more tax returns to be filed and millions of taxpayers who need assistance in filing and paying their taxes but cannot simply afford to pay accountants or tax consultants.
We want to do more but we are constrained with the taxes we need to file and pay every other week. That’s the reason for the development of our mobile app called the TaxWhizPH, an on-the-go, all-in-one app that will ease the burden of the taxpaying public most especially SEPs in paying their taxes correctly and on time.
Now, you can do more while filing and paying your taxes anytime, anywhere without any hassle!
Of course, we made sure we are working with the BIR as we want to contribute significantly in broadening our taxpayer base and increasing voluntary compliance among SEPs by improving their taxpaying experience.
One of the notable features is that it can scan your receipts just by taking a photo of it and it will extract all the important details. Then, it will generate tax returns for you in a snap and automatically validates the information.
In fact, it can generate tax returns, such as BIR Form 2550M, 1701Q, including schedules such as QAP files, among others.
Further, it will be linked to the eBIRForm platform of the BIR and payment facility of the Bank of the Philippine Islands (BPI) and also Land Bank of the Philippines to make filing and payment right at your fingertips.
No need to waste your time and energy going under the scorching heat of the sun just to line up and pay through accredited agent banks (AABs)!
Having a built-in Tax Calendar, it will also serve as your assistant in providing tax alerts regarding new issuances by the BIR as well as reminding you of the important BIR deadlines.
The target pilot users will be the more than a hundred thousand Grab drivers, as well as real estate brokers, insurance agents, TV & media personalities, doctors, lawyers, accountants, architects, etc.
Android users can already download it via Google Play Store. Just type “TaxWhizPH” It will also be available for iOS users soon.
To receive updates about the #TaxWhizPH, subscribe now at app.acg.ph for FREE.
The article reflects the personal opinion of the author and does not reflect the official stand of the Management Association of the Philippines or the MAP.

Popularly known as the Philippine Tax Whiz, Raymond A. Abrea is one of the 2016 Outstanding Persons of the World, one of the 2015 The Outstanding Young Men of the Philippines (TOYM), and founder of the Abrea Consulting Group and Center for Strategic Reforms of the Philippines (CSR Philippines). He currently serves as Adviser to the Commissioner of Internal Revenue of the Philippine government on tax administration reform in promoting inclusive growth.
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