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Taxing times: The value of two-way communication

IN Thomas Gray's poem, "Ode on a Distant Prospect of Eton College" published in 1742, he stated, "Where ignorance is bliss, 'tis folly to be wise"; a lack of knowledge will result in happiness, and you will find comfort that you do not know certain things. The same is not true in terms of taxpayer's compliance here in the Philippines because what you do not know will hurt you more.

Small businesses and individuals seem to turn to social media and online forums for a lot of their tax-related questions. Case in point is the existence of Tax Help in the Philippines claiming to be the "best nongovernmental resources for Philippine Taxation" with nearly 30,000 members belonging to the group. Many questions are being posted about compliance to Bureau of Internal Revenue (BIR) issuances, the usage of electronic filing and payment systems, and more.

I got the chance to make an inventory of the queries posted on their Facebook page. Over a period of one month, the page received a little over 120 questions broken down as follows: income tax — 24 or 20 percent; value-added tax — 6 or 5 percent; withholding tax — 11 or 9 percent; estate tax — 2 or 2 percent; local tax — 2 or 2 percent; Securities and Exchange Commission 1 or 1 percent; and percentage tax — 1 or 1 percent.

And the most questions are coming from in terms of compliance with the various issuances of the BIR with around 60 percent. Questions range from the simple errors encountered when using the electronic filing and payment system to how to refund their excess taxes made. Another observation is that the questions are coming in round the clock. While we do not expect those working in the BIR to be awake 24/7, the taxpayer is left with no choice but to post the question in the page and wait for the members to check on his/her question and give an immediate answer.

The BIR has made an attempt to automate the response to frequently asked questions through its chatbot, Revie. When Revie is accessed, a menu appears with options to select from frequently asked questions in English or Filipino. There is also an option to chat with a live agent. Perhaps the public is still unaware of the feature.

Questions and comments on the page also seem to point to potential inconsistencies in terms of communication. For example, members of the forum claim that revenue district officers can have different opinions on how to implement or operationalize memos laid down by the Commissioner of Internal Revenue. When you look at the questions individually, sometimes the questions are almost similar but when they include the specific revenue district, it seems that the requirement is somewhat different.

To be fair, it is difficult to draw conclusions without the full context of each situation. However, while inconclusive, the trend of netizens clamoring for consistency among regional district offices may indicate a need to improve their internal information drives. Is there sufficient two-way communication between the national and the revenue district offices? Is communication only one way through the issuance of memos? I remember one of my professors from the University of the Philippines-National College of Public Administration and Governance, Edna EA Co, in one of her classes that I attended, Communication is governance. A communication gap can exist between the BIR and the taxpayers. In the same way, the gap can exist between national and district offices. As defined, communication gap is a term that describes the discrepancy between what is communicated and what is comprehended. The systems of tax administration in every country, like the developing one, the Philippines, is an arduous process.

The creation of related laws, policies and procedures up to the process of operationalizing the same is a tedious process and requires consistent tweaks along the way. The method in which the revenue regulations, memorandum circulars, memorandum orders are communicated has been efficient. However, the BIR must assess whether a new and updated strategy is necessary so that the nitty-gritty could be explained comprehensively and not leave the taxpayer, or even district officers, with a lot of questions instead of clarity.

The principles of 5Es and an A, as developed by Brillantes and Fernandes (2021), should be considered. Effectiveness, efficiency, economy, equity, ethics and accountability to the taxpayers themselves should be kept in mind. The research on social media use by governments has observed that digital platforms offer a range of democratic functions for government institutions, including the capacity to raise public involvement and openness. The three-category model of push, pull and networking communication has been a popular framework for examining the data and communication that governments share on social media. These categories correspond to the open government objectives of cooperation, participation and transparency, respectively.

Currently, I have stumbled upon a TikTok account of BIR Commissioner Romeo Lumagui Jr., explaining technical items when it comes to compliance with the requirements with the bureau. This is a good starting point — changing the mode of communication while maintaining its content and an openness to speak to the general public. But there is a long way to go when it comes to reaching out to the taxpayers getting the critical information, especially when it comes to taxes.


Ernie Lat 2nd is a certified public accountant and an accounting manager at Yu Villar Tadeja & Co. — Mazars in the Philippines. The views and opinions in this article are those of the author and do not represent those of these institutions.

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