Independent taxpayer advocate proposed to expedite refund process — former official

TAXPAYERS awaiting refunds should have a third-party advocate to turn to as the Bureau of Internal Revenue (BIR) drags its feet on reimbursements, a former finance official said.

“The BIR is inefficient in reimbursing our MSMEs (micro, small and medium enterprises) and businesses of their input VAT (value-added tax). I think that gives the BIR a bad reputation, and that’s the value of having an independent tax advocate,” former Finance Undersecretary Cielo D. Magno said on Thursday during the Deloitte Tax Summit 2026.

The independent tax advocate will render opinions to the Department of Finance (DoF) and legislators on whether the BIR is working efficiently and fairly in administering the tax system, she said. 

Ms. Magno noted that the Philippines faces structural issues in digitizing revenue collection, describing current systems as siloed and stuck with legacy IT infrastructure.

“If they’re siloed, there is discretion, and when there’s discretion, there’s more room for rent-seeking and corruption,” she said.

Ms. Magno also noted that the BIR faces digital identity gaps that result in inefficiencies in its revenue collection.

These include the lack of full integration of the Philippine national ID system, the absence of a unified infrastructure that secures taxpayers’ digital identity, and account duplication and verification issues.

She said the potential to improve income and value-added tax systems via digitalization is equivalent to around 4% of gross domestic product.

This represents a substantial amount that can be captured through better digitalization and compliance, she said.

“There’s no way that we’re going to be able to digitally transform the BIR unless we abolish it and replace it with a National Revenue Authority (NRA),” she said, citing a proposal to consolidate the BIR and Bureau of Customs into the NRA.

House Bill 695, filed in 2017 by former President Gloria Macapagal‑Arroyo, proposes to replace the BIR with the NRA and protect it from political interference.

If implemented, the NRA would be established as a separate legal entity and controlled by a board with independent powers. — Beatriz Marie D. Cruz