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First of a series
Government regulators are mainly focused on what their mandates provide, which clearly is to regulate. On the other hand, the general public transacting with these regulators are compelled to do what these agencies expect, which is to comply with all the regulations and rules. The perfect ecosystem should have these two engagements efficiently functioning. Unfortunately, this is not the situation today.
A typical business should have to contend with at least 11 government offices before it can even start its operations. A business enterprise has to secure registrations or permits from the Department of Trade and Industry, Securities Exchange Commission and the local government offices (barangay and city) where it will conduct its business. Then, the business should transact with the Bureau of Internal Revenue to complete the tax compliance requirements, including securing a taxpayer identification number, official receipts, books of accounts, and tax payment obligations. The use of cash register or point of sales machines should also have prior BIR authority. If the business will have to import or export, it has to contend with the Bureau of Customs. The business should address the requirements of the Philippine Health Insurance Corp., Social Security System, and the Home Development Mutual Fund or PagIBIG fund on the welfare benefits of the employees of the business enterprise. A permit from the Department of Labor and Employment must be obtained to ensure compliance with the occupational safety and health standards of the physical office or business premises. More requirements from more government regulators are expected, depending on the nature of business of entrepreneur or company.
Business enterprises, and even private citizens, have long been complaining about the regulatory impositions and compliance requirements imposed by these government agencies dealing with business persons and companies. Complaints on voluminous requirements, long processing time, and even corruption are often raised by the citizenry and business groups.
On the other hand, the perspective of the government regulators should also be considered. These government offices reason out that they need to discharge their responsibility of ensuring that public order, welfare and other interests are maintained. They have to look after such concerns as public health, collection of taxes, employee welfare, city development planning and zoning. One way of attaining these is to impose rules and regulations that the general public should heed and comply with.
Are the positions of the regulator and regulatee (the one complying) conflicting? Are these irreconcilable? Or, are there positive directions and solutions under way and forthcoming?
I have been both a regulator and a regulatee. As the former Commissioner of the Bureau of Internal Revenue and Chairman of the Professional Regulatory Board of Accountancy, I have taken the role of a regulator imposing rules and requirements for the public to comply with. I am also a regulatee who has faced the challenge of complying with tons of requirements when dealing with government. Now, as Dean of the University of the Philippines Virata School of Business, I am able to take the scholarly and objective perspective that the regulatory compliance ecosystem has a bright future ahead of it with the government regulators and the citizenry able to come up with win-win outcomes.
(To be continued)
Joel L. Tan-Torres is the Dean of the University of the Philippines Virata School of Business. Previously, he was the Commissioner of the Bureau of Internal Revenue, the chairman of the Professional Regulatory Board of Accountancy and partner of Reyes Tacandong & Co. and the SyCip Gorres and Velayo & Co. He is a Certified Public Accountant who garnered No. 1 in the CPA Board Examination of May 1979.
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