The “Seal of Honesty”

In the presence of Vice President Robredo and BIR Commissioner Dulay, four organizations launched the ‘Seal of Honesty’ Certification Program on 31 May. The four organizations are the Integrity Initiative, the BIR, the DTI and CSR Philippines.

Why are we doing it? We are trying to promote and create a culture of honesty and integrity in paying taxes. We are paying taxes so that the government can provide the services that we need: provide an environment in which we can live in peace and order, including – but not limited to - security, health and garbage control.

As employees, we cannot evade taxes as our employers withhold them, but companies can use all opportunities to avoid taxes, sometimes moving over the border into the area of tax evasion. Here is where the idea of the ‘Seal of Honesty’ comes in.

We want business to pay the right taxes as we support the genuine tax reform, designed by the DOF and presently debated in both Houses of Congress, and are committed to ethical business and good corporate governance.

The launch of the ‘Seal of Honesty’ certification program is just a first step in the right direction. The four organizers will now have to form a technical working group (TWG) to come up with the implementing process which will include steps like

* Applying for the ‘Seal of Honesty’ certification program

* Sign the Integrity Pledge and show substantial progress in the implementation of the commitments laid down in the Pledge, making full use of the self-assessment tool the Integrity Initiative has created

* Undergo preliminary assessment to determine the risk classification of the applicant: high risk, medium risk of low risk.

The TWG will design different requirements for the three groups; we expect that it will take time for companies to comply with the requirements: for high risk companies, possibly three years, for medium risk organizations two years, and for low risk firms one year.

We will form a Board of Accreditors which will review the process the companies undertook and will eventually certify the applicant to qualify for the ‘Seal of Honesty.

What will be the benefits of taxpayers to get the ‘Seal of Honesty’:

1. Restore your peace of mind and change the way you do business without fear of the BIR;

2. Save millions of pesos from unnecessary penalties and compromises by paying the right taxes;

3. Last priority audit.

Convinced that this is the way to go? Let me outline who can apply for the ‘Seal of Honesty’:

* All businesses – and size does not matter

* Business that have been audited by the BIR regularly

* Companies that have decided to end compromises with the BIR and to never bribe BIR examiners

* Companies that are committed to pay the right taxes and – as mentioned above – have signed the Integrity Pledge and are making progress in the commitments laid down in the Pledge

* Companies that are supporters of a genuine tax reform.

I will keep you updated on the progress the TWG will make regarding rules and the process to get the ‘Seal of Honesty’ for the three risk classifications. Comments and suggestions are welcome – email [email protected].