Apart from ongoing preparations for the possible implementation of the global top-up tax, the Bureau of Internal Revenue (BIR) continues to prepare for other emerging tax measures, including a new mining royalty regime, real property valuation reforms, and cross-border duties.

These preparations form part of the country’s main tax collection agency’s efforts to make tax administration more predictable. This strategy also includes enhanced enforcement actions against illicit trade and tax evasion.

This direction was underscored during a roundtable hosted by the Swiss Chamber of Commerce of the Philippines (SwissCham), where BIR Commissioner Charlito Martin R. Mendoza reported on the initial results of the BIR DARES reform agenda.

During the event, the BIR and SwissCham signed a memorandum of understanding (MOU), establishing a framework for “regular dialogue, knowledge sharing, technical exchanges, assistance in the development and enhancement of BIR systems, and discussions on revenue and tax-related developments.”

Mendoza stressed that predictability is essential as the Bureau readies implementation guidelines for the qualified domestic minimum top-up tax (QDMTT) and the Real Property Valuation and Assessment Reform Act (RPVARA).

“Predictability becomes even more important when taxpayers are dealing with new rules, emerging tax frameworks, and complex transactions... to give taxpayers clearer guidance on how these transactions are evaluated, so businesses are not left guessing how the rules will be applied,” Mendoza explained.

To achieve this, the Bureau is overhauling its approach to audits, steering away from fear-based methods.

“Audit and assessment should be about fairness, not fear. Compliant taxpayers should not feel that they are being treated as adversaries. At the same time, those who deliberately evade their obligations should expect the Bureau to act,” he said.

Additionally, the BIR’s efforts focus on modernization, as the agency has already onboarded onto the National Single Window (NSW) platform. While the BIR has made “significant” gains on this front, Mendoza said “digital transformation remains one of the Bureau’s biggest priorities moving forward.”

On top of these goals, the BIR is eyeing reforms to its ingrained institutional culture, which has traditionally been heavily focused on enforcement and revenue collection.

“There has to be a change in mindset from being too enforcement-focused and purely revenue-centric to being more taxpayer-centric,” Mendoza said.

He also urged the business community to serve as active partners in this evolution, adding that the private sector could help nudge the BIR if the agency needs to revisit and tweak certain rules to be “more attuned” to the current landscape. (Derco Rosal)