[Ask the Tax Whiz] BIR backs down on QR badges. Will it dare audit the powerful?

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Listening to taxpayers is good governance. But reversing a requirement five days before its deadline raises a bigger question.

AT A GLANCE

The suspension of the QR badge mandate by Commissioner Mendoza is a positive step, but it raises concerns about prior stakeholder engagement and the costs imposed on taxpayers.
The letter advocates for a nationwide, risk-based tax audit initiative targeting unexplained wealth among politicians and public officials, emphasizing the need for accountability and transparency.
It calls for reforms to protect low-risk taxpayers, reduce compliance costs, and demonstrate accountability in tax investigations, while stressing that honest taxpayers should not be penalized for government delays.

This is AI-generated. Read the article for full context. Report any errors.

An open letter to Commissioner Charlito Mendoza: Suspending the QR badge mandate is a welcome development. But the real test of tax reform is whether the BIR can investigate unexplained wealth without fear or favor.

Dear Commissioner Mendoza,

Your decision to suspend the mandatory display of BIR Registration Seal Badges under Revenue Memorandum Circular (RMC) No. 113-2026 deserves recognition.

The October 31 deadline has been suspended. Display is now voluntary, with no penalties solely for non-display during the suspension.

Listening to taxpayers is good governance. But reversing a requirement five days before its deadline raises a bigger question: Why weren’t privacy concerns, technical readiness, and stakeholder consultations addressed before compliance was required?

The Bureau of Internal Revenue (BIR) reported that more than 52,700 registration documents with badges had been secured by October 14. This warrants an assessment of taxpayers’ time and compliance costs.

The suspension should not mark the end of reform. It should establish a new standard for taxpayer-centered regulation.

Consider electronic invoicing or e-invoicing.

The TRAIN Law established a system-dependent framework beginning in 2018. Eight years later, RMC No. 98-2026 requires specified taxpayers to comply by December 31, with micro e-commerce taxpayers exempted. RMC No. 110-2026 introduces accreditation requirements for third-party service providers. (READ: [Ask the Tax Whiz] Guidelines on VAT for Nonresident Digital Service Providers)

I support digitalization. But if government needed eight years to implement reform, why should taxpayers shoulder disproportionate software costs, technical difficulties, and potential penalties?

Accreditation must safeguard data and promote competition—not create unnecessary barriers for Filipino technology providers.

GOVERNMENT DELAYS MUST NOT BECOME TAXPAYER PENALTIES.

Businesses struggling to comply are not automatically tax evaders. Modernization must make compliance easier for taxpayers—not merely administration easier for the BIR.

According to 2024 government statistics, MSMEs account for 99.63% of Philippine establishments and 66.58% of employment.

These enterprises deserve proportionate regulations, not unnecessary bureaucracy.

Meanwhile, the Philippines scored just 32 out of 100, ranking 120th among 182 countries, in Transparency International’s 2025 Corruption Perceptions Index.

The index does not establish wrongdoing by any individual. But it underscores a serious public-trust challenge.

One disturbing sentiment circulating online captures the frustration: “PAYING TAXES AT THIS POINT FEELS LIKE SPONSORING CRIMINALS.”

This is no justification for tax evasion. It is a warning about eroding confidence in government accountability.

Commissioner, I challenge the BIR to launch a NATIONWIDE, RISK-BASED TAX AUDIT INITIATIVE targeting credible evidence of undeclared taxable income and unexplained wealth involving politicians, political dynasties, and public officials—from barangay halls to Malacañang.

NO SACRED COWS.

NO POLITICAL EXEMPTIONS.

NO SELECTIVE ENFORCEMENT.

Wealth or political connections alone do not establish wrongdoing. But credible discrepancies between lawful income and accumulated assets deserve investigation.

Use legally authorized cross-checks of tax returns, Statements of Assets Liabilities and Net Worth (SALNs), property records, and beneficial ownership information. Coordinate with the Ombudsman and the Anti-Money Laundering Council (AMLC) when warranted.

Build on RMO No. 22-2026 through three measurable reforms:

First, protect low-risk taxpayers. Generally exclude startups during their first three years and MSMEs with annual sales not exceeding ₱100 million from routine audit, except where credible tax risks exist.

Second, reduce compliance costs. Provide affordable electronic invoicing, just transition, and competitive provider accreditation.

Third, demonstrate accountability. Publish anonymized results on high-risk investigations, final assessments, actual collections, and taxpayer compliance costs.

Commissioner, suspending the badge requirement shows that the BIR can respond when taxpayers raise legitimate concerns.

But the bigger test is whether it can investigate the politically powerful with the same determination it regulates ordinary Filipinos.

CAN THE BIR AUDIT THE POWERFUL WITH THE SAME ZEAL IT AUDITS ORDINARY TAXPAYERS?

Because honest taxpayers are not the enemy. Corruption and tax evasion are.

AUDIT THE POWERFUL.

PROTECT THE SMALL.

RESTORE PUBLIC TRUST.

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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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