Based on the recent pronouncements from the Bureau of Internal Revenue (BIR), we expected to see improvements in the way the Bureau treats the taxpayers. There has been a promise that we can expect to see a "new" BIR. In a recent forum on policy developments, a key officer of the Bureau emphasized that taxpayer service will be a focus of the BIR. This is a shift from the position held by the previous commissioner. The focus and efforts of the Bureau then were solely on tax compliance and enforcement.
Indeed, we are seeing some changes being made, and we do commend the new BIR administration on these; but the question we need to ask first is: How does the BIR define taxpayer service?
The relationship between the BIR and a taxpayer has always been cordial at best and adversarial at worst. One party usually eyes the other with some reservations. Given this state of a relationship, does the BIR understand the customer experience that taxpayers look for? If the BIR is not clear about this, there will always be a gap between the expectation of taxpayers and the quality of service that BIR is providing. Both sides will be frustrated.
Several studies show that it is critical for suppliers of services to manage customer satisfaction. To this end, there is a common view that a supplier must have an accurate understanding of its customer's expectations, the customer value proposition. The supplier must strive to deliver such values consistently throughout the customer's journey. While this is a big challenge, the BIR has the capability to provide better and efficient services. It should strive to provide it.
I am not aware if a study has already been conducted by the BIR to determine the quality of service that a taxpayer seek. But based on my experience as a tax practitioner, I see that taxpayers, both individual and corporate, demand security and confidentiality in their tax information, ease of access and dealings, consistency in the use of tax policies and procedures, speed in processing, and fairness and transparency throughout. They expect these qualities of service to be provided to them always in all their transactions with BIR—from the time they are required to register as taxpayer, during the period when they are expected to file tax returns and submit information, and throughout the entire period they remain a taxpayer.
To truly deliver better taxpayer service, BIR must map out the different transactions that it has to make with taxpayers and, for each of these touch points, review and evaluate them to ensure that its delivery of services meets the quality expectations of the taxpayers. This is a big task, and the BIR should seriously consider it if it is its intention to serve its constituents better.
To emphasize this point, let's consider, for example, a start-up company that has to register its business for tax purposes. BIR has to assess whether the current rules to register a business—the requirements and processes that the new company needs to go through—are clear, streamlined if possible, and easily accessible. The BIR should also look at the current channels of registration. Do the BIR website and other sites on the internet that businesses would normally visit contain information about corporate registration? Does the BIR system allow online applications—including submission of documents—and send the status of application or notification of approvals online, as well? Or will it continue to require applicants to go to the BIR offices and wait for hours to be attended to? Can the processing of the approval be expedited and can the taxpayer be notified in time in case there are questions or concerns regarding its application? If there are indeed concerns, how fast will these be evaluated and resolved? Is it clear who the decision-maker will be?
Obviously, to meet taxpayer expectations, much work has to be done.
To me, for the "new" BIR to happen, it requires a set of organizational capabilities, and a drastically different mindset and culture. BIR has to study if it has the right organizational structure, the right people to understand the changing environment and the capability to identify the changes it can introduce under a situation on a limited budget. This process also requires a thorough evaluation of the current tax laws to determine if there are provisions that need to be amended or scrapped altogether because they restrict the Bureau from adopting new practices.
We have several examples of government agencies that have been successful in improving the services they provide to the public. With the right tone and strong drive from the top, I am confident that we can have a "new" BIR.
Marivic Espano is the Chairperson and CEO of P&A Grant Thornton. P&A Grant Thornton is one of the leading Audit, Tax, Advisory, and Outsourcing firm in the Philippines, with 21 Partners and over 700 staff members.
As published in Manila Times dated 19 October 2016