The government expanded its primary tax advisory council to include major foreign business chambers, aiming to smooth friction between corporations and state auditors while accelerating digital compliance reforms.

The Bureau of Internal Revenue (BIR) renewed its multi-sectoral consultative mechanism on June 23, signing a new memorandum of agreement that expands the BIR Partnership with Multi-Sectoral Group to 15 member organizations from 12.

The latest additions to the advisory council include the Federation of Indian Chambers of Commerce in the Philippines, the Philippine Institute of Petroleum, and the Swiss Chamber of the Philippines.

Established in 2023, the advisory body serves as a formal channel for institutional investors, local conglomerates, and foreign chambers to negotiate tax administration issues, compliance costs, and digitizing systemic collections. The expansion comes as the government balances aggressive revenue collection targets to manage its fiscal deficit with the need to keep the Philippines attractive to foreign direct investment.

BIR Commissioner Charlito Martin R. Mendoza said the updated agreement embeds the private sector directly into the state’s five-point priority reform agenda, known internally as BIR DARES. Private-sector engagement has already altered how the bureau approaches corporate audits, which have traditionally been a point of friction for companies operating in the country.

When the bureau began working on audit reforms under the new agenda, it turned to the advisory group to stress-test proposals, challenge assumptions, and refine policies before implementation, Mendoza said.

He noted that the structural changes rolled out during the first six months of the reform agenda have been more effectively received by corporate taxpayers because of the early vetting process.

The business-friendly approach also yielded the recently launched One-Time Tax Abatement Program for Micro Taxpayers, an initiative intended to clear backlogs and ease compliance penalties for the country’s smallest enterprises.

Mendoza said the program resulted from listening to private-sector stakeholders, underscoring that dialogue allows the bureau to design reforms responding to real concerns on the ground.

The bureau plans to continue utilizing the coalition to stress-test major policy shifts before they are made public, according to Mendoza.

He emphasized that reforms do not have to be flawless immediately, but must instead progress through iterative adjustments based on how they function in practice.

The text of the new memorandum explicitly designates the advisory body as a formal working group tasked with identifying administrative bottlenecks, offering practical policy recommendations, and smoothing the rollout of digital compliance initiatives.

The policy shift occurs seven months into Mendoza’s tenure as tax chief, during which the bureau has faced increased pressure to bolster collections without dampening economic growth.

Government and private sector cooperation has so far protected enterprises and industries while supporting the broader economy, Mendoza added.

The full roster of the expanded advisory group reflects a broad cross-section of the Philippine corporate landscape. Alongside the newly added Indian, Swiss, and petroleum groups, the coalition includes the Philippine Chamber of Commerce and Industry, the Management Association of the Philippines, the Tax Management Association of the Philippines, and the Philippine Institute of Certified Public Accountants.

Other key institutional members participating in the policy dialogues are the Financial Executives Institute of the Philippines, the Association of Certified Public Accountants in Commerce and Industry, the Association of Certified Public Accountants in Public Practice, and the Philippine Exporters Confederation Inc.

The coalition is rounded out by the Joint Foreign Chambers of the Philippines, the Federation of Filipino-Chinese Chambers of Commerce and Industry Inc., the Makati Business Club, and the Alliance of Tech Innovators for the Nation.

Under the terms of the updated agreement, these fifteen organizations will maintain a regular schedule of dialogues with state tax directors. The immediate focus of the working group will center on accelerating digitalization, reducing the administrative costs of compliance, and advancing the government's broader ease-of-doing-business mandates.