Selecting and implementing business technology, whether software applications or IT infrastructure, often leads to unexpected complications ranging from budget blowouts to a failure to meet business needs.
Whenever one hears about bank secrecy law these days, there’s always a controversy attached to it. Recently, it was mentioned in the Senate hearings on the proliferation of drugs and illegal activities in our country. Before that, it crept up in impeachment proceedings on graft and corruption, investigations on tax evasion cases and international discussions on financial reforms.
The legal landscape for mergers and acquisitions in the Philippines has been developing at an unprecedented pace over the last few years. In July 2015, Congress passed RA 10667 or the Philippine Competition Act, and in June 2016, the Philippine Competition Commission promulgated the Implementing Rules and Regulations of the said law. While it is inaccurate to say that antitrust laws never existed in the Philippines prior to 2015, RA 10667 is the first comprehensive competition legislation in the country. It is also the first time the Philippines created a specialized antitrust body to enforce antitrust laws and prevent anti-competitive agreements.
Professional service firms, as unique organizations, cater to the needs of companies across various industries through vending time, knowledge and expertise of skilled individuals. With talent as the core of our business, it comes as no surprise when the business strategy starts to shift from being R.O.I-centric to being people-centric. We call it the “People Strategy”.
It is said that taxation should not restrict trade. For when it does, the flow of a progressive economy is likewise hampered. Importers have a reason to smile this time because last Aug. 31, 2016, the Commissioner of Bureau of Internal Revenue (BIR) issued Revenue Memorandum Order (RMO) No. 56-2016. This amends the guidelines for securing importers clearance certificate (BIR-ICC) and customs brokers clearance certificate (BIR-BCC).
We are all familiar with the refrain: Management finds employee performance to be slacking off while certain routine matters are flagging. What are the common responses to an issue and what are needed to provide or revive knowledge and skills within an organization? The typical answer, of course, is training. While effective, if designed and implemented right, one would think at some point whether training is the only solution, and how does it really impact on the business strategy. Many companies, especially the more progressive ones, now look at learning solutions as an integral part of their business strategy. They adopt a broader perspective and approach for assessing and meeting their organizational requirements. Based on my experience with some of these organizations and their leaders, I have chosen three key principles, which I now put forward to other companies for consideration and, if deemed appropriate, apply them. They are: Make the Learning & Development (L&D) group your internal business consultants The L&D group is often looked at in an organization as just a provider of training and seminars. This calls for a change in mindset, from being a training provider to an internal consultant. As consultants, their value comes from them being able to understand the “business” of the company, including how it operates, its product and service offerings, its constituents, its business strategy, etc. Thus, when a problem that is initially identified as a training issue is given to the L&D group, they should first find out what the business and performance requirements are, determine the issues and the root causes of such problems, and only then recommend the appropriate solution. In some cases, it may turn out to be outside the scope of L&D. This should be fine. But thinking only like trainers, on the other hand, would often limit them to the discussions they have with you and their solutions might just be too focused on the training needs. That will prevent them from seeing the bigger, truer picture. So, how do you make them consultants? Make the L&D group your business partners, and encourage the group to ask questions; the right questions. Typically these questions are open-ended at first, so that they will encourage a broader discussion of the issue. Questions like, what keeps you awake at night, what is the problem you are trying to solve or what does success look like, may seem to be simple and trite, but it really opens up the discussion to explore the different areas that may be contributing to the needs or even beyond. Provide a variety of learning solutions, not just training Learning solutions, unlike training, provide a broader perspective that considers a wider array of learning approaches—experiential, social, and structured programs—typically referred to as the 70-20-10 Principle that were introduced by the Center for Creative Leadership, to enhance organizational competencies. In this model, training is just one of, but not the only, solution. So how do you apply the 70-20-10 Principle? Consider ways by which your organization can enhance the learning experience. You can implement on-the-job programs through secondment, cross-team postings, or individual swaps/exchanges. These assignments can even extend to clients or external organizations. You can also cascade a coaching and mentoring process where constant feedback and knowledge sharing is done across all levels. It’s about building a culture and structure where your employees seek and are able to learn by application and from others, through programs or ad-hoc opportunities. Align the learning strategy with the business strategy Learning can be strategic as well as tactical. A major difference between the two is that strategic learning focuses on supporting the organization’s vision and strategy, while tactical learning focuses on addressing performance gaps. Strategic learning is long-term and tied up to organizational metrics while tactical learning is short-term and measured through team or individual performance indicators, typically around productivity, quality, and timeliness. Training done across the organization is not necessarily strategic unless it is aligned with organizational outcomes and goals. So what do you do to start aligning your learning programs into strategy? A useful first approach is auditing your learning initiatives. Determine which of those initiatives support your strategy and which address specific team or individual performance needs. It’s a simple method to see where the gaps are, but it really challenges you to evaluate whether the effort and resources are being channeled to where they make the most impact and sense. As we strive to direct our organization forward, there has to be a deliberate effort to realign our learning perspective and paradigms. Positioning L&D closer to the business core, and providing a wider range of learning experiences, will help increase organizational effectiveness, improve employees’ morale as well as the company’s chance of success. Mon San Jose is a director with the knowledge management group of P&A Grant Thornton, a leading audit, tax, advisory, and outsourcing firm in the Philippines, with 21 partners and over 700 staff members.
The first of September 2016 marks the resumption of the previously-suspended tax audits being handled by the Bureau of Internal Revenue (BIR). This was by virtue of Revenue Memorandum Circular (RMC) No. 91-2016. The said RMC mentioned that the lifting of the suspension was done since “the conferred authority under the laws to the BIR for the collection of taxes, to be more effectively administered and implemented, requires some form of enforcement activities to ensure the collection of correct taxes at the times prescribed by the law.” RMC No. 91-2016 lifted the suspension of all field audit and operations of the BIR in relation to the examination and verification of the taxpayers’ books of accounts, records, and other transactions. Prior to this RMC, the BIR issued RMC No. 70-2016 which suspended the field audit of the BIR examiners (except in certain cases, like those cases already prescribing and those cases involving taxpayers retiring from business), as well as the issuance of written orders to audit or investigate the internal revenue tax liabilities of taxpayers. According to news reports, this previous suspension of BIR audits took place when the new BIR Commissioner was made aware of certain tax investigations that took years to be processed and were saddled with delays, some for causes that cannot be explained. Now, as the suspension of the BIR audits is lifted, the BIR is definitely back to the grind. But, what can the taxpayers expect? It could be expected that starting this month of September, several notices of tax audits will be issued to the taxpayers, and that the BIR examiners will be in full throttle again in their investigations. However, many taxpayers are anxious that there might still be cases of assessment harassment, wherein: BIR examiners may harass taxpayers by producing unsupported huge amounts of initial tax findings against the taxpayers, like what happened in the past. This situation is feared by many to be a possible source of corruption. Although based on recent news, while the audits are suspended for two months, the BIR is showing that it is serious in disciplining its examiners by releasing reports that there were investigations that are being made for allegedly erring examiners. Some have been suspended while others were already dismissed out of service. How this disciplinary approach will be sustained by the BIR is something that remains to be seen. Nonetheless, the taxpayers should be prepared for any BIR audit knowing that the BIR’s findings could be on factual issues and sometimes on a legal matters. Thus, taxpayers should be knowledgeable and updated on the developments about topics affecting their business operations. Also, they should always have a review mechanism to check whether the tax practices of their companies are in accordance with the tax rules. The taxpayers may also consider looking back to check whether there were errors committed in the past (for open years that could still be subjected to BIR audits), and determine whether amendments to the tax returns have to be made. Note that once the taxpayer receives a notice of audit from the BIR, the taxpayer can no longer amend its tax returns. As commonly observed, the usual findings of the BIR in assessments include unsupported expenses due to documentation deficiencies, unsupported creditable withholding taxes and input value-added taxes, withholding tax deficiencies, and differences from comparisons of amounts of identified accounts per books as against the corresponding amounts in the tax returns, among others. Hence, the taxpayers, in reviewing their practices and documentations, should not forget to verify these items. Note that simple hits and misses with regard to the tax impact of the companies’ practices could mean millions, billions even, of wasted funds for tax exposures. Thus, the taxpayers should be cautious about this. On another note, in case there are instances of harassment during assessments, the taxpayers should have to be firm in their values. Resorting to bribery would just encourage the practice of some erring examiners to continue, and will promote the system of corruption that we all abhor. Needless to say, bribery is a criminal offense punishable by imprisonment. The two-month suspension of BIR audits has already passed. It remains to be seen on how the BIR examiners will approach their resumed examinations, considering that the target revenue of the BIR for the taxable year 2016 is about P2 trillion. Will they be strict? Will they be reasonable? At any rate, nothing beats an honest and prepared taxpayer. Cheryl R. Gatdula is a senior of the Tax Advisory and Compliance division of Punongbayan & Araullo. P&A is a leading audit, tax, advisory and outsourcing services firm and is the Philippine member of Grant Thornton International Ltd.
In today’s competitive economic climate, organizations of all sizes must find new ways to control costs—and achieve more with less. With most small and medium-sized companies typically spending between 45 and 65 percent of their sales revenue on the procurement of raw materials , fine-tuning your purchasing processes—and shaving off even a small percentage of your procurement costs—can go a long way in better positioning your business for the road ahead.
