Strengthening tax awareness

Taxes have been around for thousands of years even in biblical times; and will continue to coexist in our civilization. Indeed, paying taxes is a burden we must accommodate and learn to live with. After all, taxes are collected for the welfare of the people.

For Philippine taxes, while there are questions and concerns from some people about the enforcement and collection of taxes, the BIR has been optimistic on its tax campaigns year after year. The BIR has actually conducted several tax campaigns and tax awareness activities.

As part of the BIR’s campaign, several BIR officers have visited certain taxpayers to talk about tax compliance, in addition to the tax campaign events organized by the BIR in different regions, encouraging individuals and business firms to comply with tax obligations. More often, BIR officers have held dialogues with different sectors to talk about certain tax policies and procedure and to discuss changes in tax laws and regulations.

The BIR has also introduced the enhanced chatbot named "Revie," the interactive taxpayer assistant, an artificial intelligence program that can be accessed on the BIR’s website which aims to give people easy access to the program and services of the BIR. It assists taxpayers with their general tax-related concerns which can be accessed 24/7 on its website.

Further, the BIR to make the relationship between taxpayers more accessible, managed to create and adopt the use of social media platforms to widely and quickly disseminate information on new rules and regulations, policies, procedures and updates on various programs and projects. In RMO No. 7-2022, the BIR prescribed the guidelines for creating and managing its official social media accounts to help reach more taxpayers.

Likewise, the BIR conducted several seminars/webinars as part of its awareness campaign to encourage and help taxpayers understand the importance of paying the correct taxes and availing themselves of its programs. During the tax filing season for example, the BIR held a webinar to guide corporations and partnerships in filing its annual income tax returns. The ultimate goal is to disseminate tax information and increase tax collection. 

To further promote public awareness, the BIR does not only involve business firms, but also, it involves the students. It has been said that tax awareness should begin in the early stages of education, in schools and universities. Recently, the BIR issued Revenue Memorandum Circular No. 64 – 2023, wherein the BIR launched a nationwide search for the Philippines’ Brightest Buwis Masters of 2023 with the objective of widening the public’s awareness and knowledge of the country’s tax laws and regulations particularly among the young generations, the future taxpayers.

The aim of the program is to conduct a Tax Quiz open to all college and university students nationwide. With the help of this program, it will boost tax education and consciousness on the matter. The young generations are intended to significantly influence tax compliance. It seeks to condition the minds of the young generations regarding their tax obligations. Tax education in this form affects young people’s behavior and perspectives in our tax system.

With the above tax campaigns and tax awareness activities, among other BIR activities and programs, the BIR has been showing that it indeed promotes tax education.  Needless to say, continuous tax education on the part of the taxpayers could lessen compliance mistakes. It is not unusual that there are instances where the sources of BIR audit findings are just errors in applying an expanded withholding tax rate on certain purchases; or perhaps, the error is just on determining whether a certain compensation is subject to fringe benefits tax or not.

There are also cases, wherein the dispute with the BIR is just on documentation and substantiation of an expense account, be it an issue of deductibility for income tax purposes or  an issue of allowable input VAT on certain purchases. There are also instances wherein certain taxpayers are not knowledgeable or are confused about some procedures or type of documents for submission to the BIR.

All the above errors or apparent confusion can be avoided with proper knowledge of the tax laws and procedures. Surely, there will be continuing challenges that will be encountered to promote and carry out tax laws and rules, since issues or questions are normally attached to the tax itself.  However, with proper tax education, taxpayers will achieve and maintain tax compliance with less friction with the BIR. Promoting tax education and strengthening tax awareness are ways to equip our taxpayers in their journey; and hopefully, more and more of these will come moving forward.

Let’s Talk Tax, a weekly newspaper column of P&A Grant Thornton that aims to keep the public informed of various developments in taxation. This article is not intended to be a substitute for competent professional advice.

As published in BusinessWorld, dated 06 June 2023