The Department of Finance (DOF) is seeking a possible grant from the United States in establishing the Philippines’ first tax academy, which will serve as a training institution that will provide revenue officials and employees continuing professional education on improving tax collection competence and efficiency.

Finance Secretary Carlos Dominguez III pitched the project in a recent meeting in Washington DC with David Malpass, the US Undersecretary of the Treasury for International Affairs.

Dominguez told Malpass the Philippine Tax Academy, which the DOF plans to set up in January, will be a long-term initiative of the DOF in professionalizing the Bureaus of Internal Revenue (BIR) and of Customs (BOC).

“Both [agencies] are under me and we’re doing short-term things but really, in the long term, we need better skills, better ethics,” Dominguez said of the planned tax academy project during the meeting with Malpass.

The finance chief also briefly discussed the DOF’s tax academy project in a recent forum in Washington DC organized by the US think tank Center for Strategic and International Studies (CSIS).

Dominguez said a previous US grant that aims to improve business processes and revenue collections in the BIR was partly instrumental in the success of the Philippines’ recent effort to collect the largest sum of taxes ever from a single corporate entity.

“The assistance to us really bore fruit. Because of the help they gave us in improving the skills of the BIR in analyzing data, we were able to nail the largest tax-fraud case in history. We collected $600 million recently from a cigarette company that was cheating on taxes, and I said to some extent that’s due to the help of the US,” Dominguez said at the CISS forum.

He was referring to Mighty Corp., which promptly offered to settle its tax liabilities and shut down its operations after the BIR had lodged three criminal complaints against it over the use of counterfeit tax stamps.

According to Dominguez, the government stands to gain almost P40 billion in additional revenues from the “sin” tax on tobacco products starting in 2018, following the move by Mighty Corp. to settle its tax liabilities, close shop and sell its assets to Japan Tobacco Inc. (JTI).

Dominguez said the planned tax academy would not involve any construction of new buildings but would focus on training revenue and customs officers to improve their efficiency and competencies in tax matters.

Malpass said Dominguez’s plan to save on funds by just renting out space in local community colleges and universities to house the campuses of the tax academy was a “good idea.”

Dominguez said establishing the tax academy, which is mandated by law, would help initiate a “culture change” within the BIR and BOC.

“We could use a lot of help from [the United States]. You have a very good IRS (Internal Revenue Service) and Customs, and we can learn certainly a lot from you,” Dominguez told Malpass.

In both his meeting with Malpass and at the CSIS forum, Dominguez said he would like to transform the BIR and BOC into highly professionalized agencies in which its employees carry out their duties in the same way that agents of the US Federal Bureau of Investigation (FBI) do so with honesty and integrity.

“I want these guys (at the BIR and BOC) to be like your FBI, the men in black, who are going to collect taxes the right way, be honest. And really, it is a culture change that we are looking for. And we can benefit a lot from that,” Dominguez said at the CSIS forum.

The DOF is now coordinating with the School of Economics of the University of Philippines (UP) and the University of Makati (UMak) to explore possible tie ups in setting up the country’s first Philippine Tax Academy.

The academy’s operations will be funded from the excess income of the Bureau of Treasury (BTr), as recommended by the Department of Budget and Management (DBM).

Republic Act No. 10143, which was signed into law almost seven years ago during the 14th Congress, empowers the DOF to set up a tax academy to provide continuous training and education to personnel of the BIR, BOC and the Bureau of Local Government Finance (BLGF).