BIR, SwissCham partner on taxpayer-focused reforms

By Francis Allan L. Angelo

The Bureau of Internal Revenue and the Swiss Chamber of Commerce of the Philippines have signed a memorandum of understanding to deepen public-private cooperation on tax administration, digital transformation, and taxpayer service, as BIR Commissioner Charlito Martin R. Mendoza reported early gains from his first six months of reforms under the BIR DARES agenda.

The MOU was signed during SwissCham’s “Policy to Practice” Roundtable on June 24, 2026, where Mendoza briefed SwissCham members, Swiss Embassy representatives, and other stakeholders on reforms aimed at making tax administration more predictable, compliance easier, and tax policy more responsive to broader public welfare needs.

The reforms matter to businesses and ordinary taxpayers because a clearer and less burdensome tax system can lower compliance costs, reduce uncertainty, improve trust in government, and support services that depend on public revenue, including health care, energy, housing, and education.

“Taxpayers are more likely to understand, support, and comply with a reform when they know their concerns were heard and considered during its development. One lesson from the first six months of BIR DARES is that reforms tend to work better when the people affected by them help shape them,” Mendoza said.

BIR DARES, launched in January 2026, is the bureau’s five-point reform framework covering Digital and Data Transformation, Audit Reform and Accountability, Revenue Collection and Revenue Base Protection, Employee Empowerment and Welfare Promotion, and Service Excellence and Stakeholder Engagement. The BIR earlier said the agenda was launched at its Jan. 21, 2026, directors’ conference, with audit reform set as the first priority.

Mendoza said one of the bureau’s first priorities was improving predictability in tax administration, especially in audits.

“While enterprises can adapt to most requirements, what is more difficult to manage is uncertainty,” Mendoza said.

In January, the BIR introduced audit reforms that included a one-Letter-of-Authority-per-taxpayer-per-taxable-year policy, the LOA Verifier, stronger accountability mechanisms, and clearer procedures and safeguards for tax audits.

“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,” Mendoza said.

The BIR said it continued enforcement actions against illicit trade and tax evasion through targeted operations and criminal case filings even as it sought to make tax administration more predictable.

The bureau also issued guidance and prepared for emerging tax frameworks, including the proposed Qualified Domestic Minimum Top-Up Tax, clarificatory guidance on the tax treatment of cross-border services, implementation guidelines for the new mining royalty regime, and preparatory work for the Real Property Valuation and Assessment Reform Act, or Republic Act 12001, led by the Department of Finance.

RA 12001, signed on June 13, 2024, seeks to establish nationally consistent real property valuation standards, adopt market value as the single valuation base for real property-related taxes, strengthen local government revenue capacity, and promote digital technology in property tax administration.

“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 said.

Mendoza said the BIR also reviewed the taxpayer journey, from registration to transactions with the bureau and resolution of issues, to determine where processes could be simplified.

“During the first six months of BIR DARES, we looked at the taxpayer journey—from registration, to transactions with the Bureau, to the resolution of issues— and asked where processes could be simplified and made more accessible,” Mendoza said.

The bureau launched the Digital TIN through the eGovPH platform and introduced a QR-enabled Certificate of Registration and Registration Seal Badge for online businesses.

Through a QR scan, consumers can verify whether an online seller is registered with the BIR, while sellers can show compliance without publicly disclosing unnecessary registration information.

The BIR also launched the Taxpayer Portal for the Large Taxpayers Service, giving taxpayers a unified digital view of registration, filings, payments, and other key tax information.

The bureau said it was one of the first two government agencies onboarded to the National Single Window platform after user acceptance testing for the Electronic Authority to Release Imported Goods, or eATRIG, while work continues on the Electronic Tax Residency Certificate, or eTRC, to simplify cross-border transactions.

Among the most significant reforms, Mendoza said, was the Ease of Closing Business initiative, which simplified the cancellation of BIR registration for taxpayers winding down operations.

The BIR also launched the One-Time Tax Abatement Program for qualified micro taxpayers, providing a simplified mechanism to resolve outstanding tax liabilities and return to compliance.

“For many years, the government focused on making it easier to start a business, operate a business, and pay taxes. We believed similar attention should be given to making it easier to properly close one,” Mendoza said.

Mendoza said the BIR’s work goes beyond collection because tax administration affects public outcomes in priority sectors.

“The impact of tax administration extends beyond collection and compliance. While the BIR’s primary mandate is revenue collection, we are also part of a broader government effort to improve competitiveness, expand access to essential services, and support national development. How tax laws are implemented can influence outcomes in healthcare, energy, housing, education, and other priority sectors,” Mendoza said.

The bureau cited the continued publication of the list of VAT-exempt medicines, now covering more than 2,200 FDA-endorsed medicines, as well as clarifications on the Lifeline Subsidy and Green Energy Auction Allowance in the energy sector, streamlined requirements for socialized housing projects, and clarifications on tax incentives involving education partnerships.

The BIR said early indicators showed the reforms were producing results.

From January to May 2026, the BIR collected PHP 1.434 trillion in gross revenues, exceeding its collection target and posting growth from the same period last year.

The bureau was also recognized by the Anti-Red Tape Authority as one of the most improved national government agencies in terms of complaint volume reduction.

“The willingness of stakeholders to participate in these discussions, provide feedback, and remain engaged throughout the reform process is itself a positive sign. Taken together, these indicators suggest that reform and revenue performance can move together. That a more predictable tax administration, easier compliance, and better taxpayer service can also support stronger revenue performance and greater confidence in the tax system,” Mendoza said.

The roundtable covered audit selection criteria, e-Invoicing implementation, taxpayer communication, system integration, and data privacy considerations.

SwissCham Chairperson Felix Fiechter acknowledged the BIR’s transformation under BIR DARES and said SwissCham wanted to remain an active partner in future tax reform discussions.

Swiss Embassy Deputy Head of Mission Hans-Christian Baumann welcomed the bureau’s digitalization, taxpayer service, accountability, and audit modernization initiatives.

“As reforms move from policy to implementation, continued engagement with stakeholders is key. Effective reform is not only about introducing new systems and procedures, it is also about ensuring that their measures are practical, predictable, and responsive to the realities faced by taxpayers and especially by businesses,” Mr. Baumann said.

During the panel discussion, Atty. Lucila Vicerra commended Mendoza’s decision to suspend and review tax audits, describing it as a bold step that showed the BIR’s willingness to listen to taxpayers and stakeholders.

Atty. Ignatius Michael Ingles said tax administration had shifted in recent months from “sludge” to “nudge,” citing the Ease of Closing Business reform and the QR-enabled registration verification system for online sellers as examples of easier compliance.

The MOU establishes a general framework for cooperation between the BIR and SwissCham through regular dialogue, knowledge sharing, technical exchanges, assistance in developing and enhancing BIR systems, and discussions on revenue and tax-related developments.

“We have made significant gains, but digital transformation remains one of the Bureau’s biggest priorities moving forward. Through the Memorandum of Understanding we sign today, we hope to sustain that cooperation through regular dialogue, knowledge sharing, and collaboration,” Mendoza said.

Mendoza closed the dialogue by thanking participants and reaffirming the bureau’s commitment to sustained engagement with the business community.

“Thank you for your suggestions. We hear you, we are listening to you,” the Commissioner said.

“We know that it is important that we become a partner in the ease of doing business. There has to be a change in mindset from being too enforcement-focused and purely revenue-centric to being more taxpayer-centric. We need two things from you: (1) if we have a new issuance, help us cascade it to your members and help us explain it to them; and (2) if there are revenue issuances that need revisiting, let us know and help us to be more attuned to the needs of the present times,” Mendoza said.

Also joining Mendoza at the roundtable were Deputy Commissioner Larry M. Barcelo of the Legal Group, Deputy Commissioner Marisa O. Cabreros of the Special Reforms Group, and Deputy Commissioner Ma. Rosario Charo G. Enriquez-Curiba of the Information Systems Group.