I came across a very interesting study on tax gap while doing my research for my University of the Philippines doctoral dissertation. This tax gap paper is the October 2023 report of the Internal Revenue Service of the United States of America that released the updated tax gap estimates (https://www.irs.gov/pub/irs-pdf/p5869.pdf). The tax gap is the difference between potential tax revenues from actual tax collections. The difference provides an estimate of how much the tax-collecting offices, like the IRS or our Bureau of Internal Revenue (BIR), lose annually due to taxpayer non-compliance or non-reporting of taxable transactions. The tax gap is loosely referred to as tax evasion in some studies on the topic.
I am pleased to note that the Philippines, as represented by Bureau of Internal Revenue (BIR) Commissioner Romeo Lumagui Jr., participated in the Organization for Economic Cooperation and Development (OECD) Forum on Tax Administration (FTA) annual plenary meeting in Singapore from October 11 to 13, 2023. This event gathered around 50 tax commissioners and delegates worldwide, including representatives from international organizations, regional tax administration bodies, businesses, and academia. At this meeting, the Tax Commissioners agreed on new areas of collaboration to pave the way for transforming the future of tax administration.
The October 2023 Certified Public Accountant (CPA) Licensure Examination results were released by the Professional Regulatory Board of Accountancy (BOA) last week. Out of 8,734 examinees, only 2,740 passed, for a 31.37 percent passing rate. Now is a good time to assess the aftermath of this event.
While doing my readings for my doctoral dissertation research, I came across the Tax Inspectors Without Borders (TIWB) program. This is relevant to my proposed topic for my Doctoral in Public Administration at the University of the Philippines. The Bureau of Internal Revenue (BIR), in its pursuit of its enforcement activities, may also consider tapping this TIWB program.
The Secretary General of the Organization for Economic Co-operation and Development submitted a Tax Report to the Group of 20 (G-20) leaders this September 2023 during their summit meeting in India. This Tax Report contained updates on tax issues and developments prioritized by OECD and the leaders of 20 of the world’s largest economies.
The various stakeholders of the accounting profession had a productive workshop activity last week in an out-of-town venue. I was one of the invited resource persons for this workshop to deliberate on the Policies, Standards and Guidelines for the Graduate and Undergraduate Accountancy programs. A lot of issues and concerns were discussed, but one of the topics that got my attention was the plan of the Professional Regulatory Board of Accountancy (BOA) to reform the Licensure Examination for Certified Public Accountants (CPA Examination).
For a long time now, I have been an advocate for promoting and enhancing the CPA Philippines brand. The Certified Public Accountants of our country have long been serving the world and the Philippines. The centennial year of the accounting profession is now being commemorated this year. Yes, the Professional Regulatory Board of Accountancy has been churning out nearly 200,000 CPAs over the past 100 years since 1923 when BOA was created. For all these milestones and accomplishments, there is a need to assess once more the state of CPA Philippines, including what must be done to push forward the accounting education.
The Official Receipt (OR) for sale tele-tax-novela now shifts to the episode of the investigation to be conducted by the Board of Accountancy (BOA) and a Hearing Officer designated by the Professional Regulations Commission (PRC). The Bureau of Internal Revenue (BIR) previously filed an administrative case against the Certified Public Accountant (CPA) for violating the Philippines Accountancy Act of 2004 and the various rules and regulations.
The tele-tax-novela continues to a sub-plot of the role of the external Certified Public Accountant (CPA) auditors in the “Official Receipts (OR) for sale” fraud story. The CPA plays an integral part in this saga. He is tasked to provide assurance that the business operations of his client are presented fairly in the financial statements (FS) and are in accordance with the Philippine Financial Reporting Standards.
The tax tele-novela continues. Coming into the saga are the other Partners of the Masterminds. These persons may not be as devious as to their intent and extent of defrauding the government of money that could have been collected by the Bureau of Internal Revenue (BIR) in this “Official Receipt (OR) for Sale” scam. They may be just the bit players in this tax tele-novela. The main villains are the Masterminds cum sellers and the buyers of the fake ORs using this scheme to evade payment of billions of pesos of taxes. But still, these persons are connivers in this tax scam syndicate.
This week, the luminaries and the stakeholders of the Philippine accountancy profession troop to the Manila Hotel to hold the grand celebration of the centennary, or 100 years, of the accountancy profession in the Philippines. On March 17, 1923, Republic Act 3105 was promulgated to create the Board of Accountancy, and the beginning of the professionalization of the profession with BOA tasked to administer the Certified Public Accountants (CPA) licensure examinations. The theme for the centenary celebration is “Celebrating the Past, Transforming the Present, Shaping the Future.” This is a very apt message that the leaders and stakeholders of the profession should heed since a serious look at the present state of affairs and the imperatives of the future is a must to have a truly meaningful 100th-year celebration.
IT is called civic-mindedness. This is essentially showing concern and contributing to the public or society. After my retirement from my deanship at the University of the Philippines Diliman School of Business, I have decided that my act of civic-mindedness will be giving back and offering my services to the city where I have been a long-time resident.
IN the past weeks, I have written two articles in this column on the recent tax crime of the sale of fake receipts discovered by the National Bureau of Investigation (NBI) and the Bureau of Internal Revenue (BIR). On January 2 and 16, 2023, I wrote the article entitled “Receipts for sale” and “To catch a (tax) thief,” respectively. My third article on this subject is turning out to be a continuation of my series of write-ups resulting from my investigative tax journalism (a sexy term for this work), or at the very least a research undertaking to support the dissertation paper that I am preparing for my Doctoral Program in Public Administration that I am now completing at the University of the Philippines National College of Public Administration and Governance.