Suspending the BIR’s QR registration badge requirement was a welcome response to taxpayer concerns. The harder test for Commissioner Charlito Mendoza is whether the agency can make compliance fairer for small businesses while investigating credible signs of undeclared income among powerful officials.

A late reversal, with costs to assess

The Bureau of Internal Revenue suspended the October 31 deadline under Revenue Memorandum Circular No. 113-2026. Displaying the registration seal badge is now voluntary, and taxpayers won’t face penalties solely for not displaying it during the suspension.

The reversal came five days before the deadline. That timing raises questions about why privacy, technical readiness and consultation weren’t settled before taxpayers were told to comply. By October 14, the BIR said more than 52,700 registration documents bearing badges had been secured. The agency should assess the time and cost businesses spent meeting the requirement.

Taxpayer feedback can improve policy, but a suspension alone won’t establish a better standard. Future rules should account for implementation capacity and compliance costs before deadlines arrive.

Digital compliance needs a workable transition

Electronic invoicing presents a larger implementation challenge. The TRAIN Law set out a system-dependent framework in 2018. Eight years later, RMC No. 98-2026 requires specified taxpayers to comply by December 31, while exempting micro e-commerce businesses. RMC No. 110-2026 sets accreditation requirements for third-party service providers. (READ: [Ask the Tax Whiz] Guidelines on VAT for Nonresident Digital Service Providers)

Digitalization can help taxpayers and the BIR, but businesses shouldn’t bear disproportionate software costs, technical problems or penalties when implementation has taken years. Accreditation should protect data and leave room for competition among Filipino technology providers.

Businesses that struggle with new systems aren’t automatically evading tax. Modernization should make compliance easier for them, rather than simply making administration easier for the BIR. That matters especially for micro, small and medium enterprises, which made up 99.63% of Philippine establishments and 66.58% of employment in 2024, according to government statistics.

Rules for these firms should reflect their capacity. Abrea proposes affordable invoicing tools, a workable transition and proportionate regulation.

Public trust depends on even enforcement

The Philippines scored 32 out of 100 and ranked 120th among 182 countries in Transparency International’s 2025 Corruption Perceptions Index. The score doesn’t establish misconduct by any person, but it points to a public-trust problem.

Online, one expression of frustration puts it bluntly: “PAYING TAXES AT THIS POINT FEELS LIKE SPONSORING CRIMINALS.” That sentiment doesn’t excuse tax evasion. It signals that people want greater accountability for how public money is handled.

Abrea calls on the BIR to start a nationwide, risk-based audit initiative focused on credible evidence of undeclared taxable income and unexplained wealth among politicians, political dynasties and public officials, from barangay halls to Malacañang. Wealth or political ties aren’t evidence of wrongdoing. Discrepancies between lawful income and accumulated assets, however, can warrant investigation.

He recommends using legally authorized checks of tax returns, Statements of Assets, Liabilities and Net Worth (SALNs), property records and beneficial ownership information, with referrals to the Ombudsman and Anti-Money Laundering Council when warranted. He also urges the BIR to build on RMO No. 22-2026 with three changes:

• Generally keep startups in their first three years and MSMEs with annual sales of ₱100 million or less out of routine audits, except when credible tax risks arise.
• Lower compliance costs with affordable electronic invoicing, a workable transition and competitive provider accreditation.
• Publish anonymized results covering high-risk investigations, final assessments, actual collections and taxpayer compliance costs.

The badge suspension shows the BIR can respond to legitimate concerns. Its broader credibility will depend on whether it applies the same determination to powerful taxpayers as it does to ordinary Filipinos. The measure of reform is simple: audit the powerful, protect small businesses and rebuild public trust.

– Rappler.com

Mon Abrea, CPA, MBA, MPA (Harvard) is a global tax policy expert and Chief Tax Advisor of Asian Consulting Group (ACGlobal). He advises governments, multinational enterprises, and international organizations on tax policy, investment competitiveness, and fiscal reform. He is the author of Reimagining the World Without Corruption and Why Invest in the Philippines? CREATE MORE Edition, and has represented the Philippines in policy dialogues at the OECD, World Bank, and other international forums.

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