Global tax policy expert Mon Abrea is pushing for a sweeping set of reforms that treat tax policy not just as a revenue tool, but as a weapon against corruption and a signal to global investors that the Philippines is serious about clean, predictable governance.
“A fair, predictable, and well-enforced tax system is one of the strongest anti-corruption tools a country can have — and one of the most powerful signals to serious investors,” Abrea said.
Here are the 10 key reforms he says can reduce corruption risks while protecting Filipino workers and MSMEs:
1. AI-Driven, risk-based audits
Use artificial intelligence (AI) and data analytics to target large-scale tax evasion and corruption, instead of harassing small businesses. This shifts enforcement toward big offenders while shielding MSMEs from abusive audits.
2. Adopt the OECD global minimum tax
Immediately implement the OECD/G20 Global Minimum Tax (QDMTT) so multinational profits are taxed fairly in the Philippines protecting national revenue and reducing aggressive tax avoidance.
3. Raise income tax exemptions for workers
Increase exemptions to boost take-home pay, expand consumption, and reduce pressure on ordinary wage earners shifting the system away from overtaxing compliant individuals.
4. Cut VAT from 12% to 10% — but tighten compliance
Lower rates while strengthening digital enforcement to broaden the base and reduce leakages — proving that efficiency, not high rates, drives revenue integrity.
5. Scrap distortionary and corruption-prone taxes
Abolish taxes that create loopholes and discretion, including travel tax, DST (documentary stamp tax) on MSME loans and insurance, taxes on regular savings, condominium capital gains, amusement taxes, arbitrary local levies
6. Shift estate and donor’s taxes to a wealth-based system
Replace current structures with a progressive wealth tax targeting ultra-high-net-worth individuals, closing avoidance channels often used to hide large asset transfers.
7. Lift bank secrecy for anti-corruption enforcement
Mandate real-time financial data sharing among the BIR, AMLC, Ombudsman, COA, and other agencies to accelerate detection of illicit wealth.
8. Impose a 200% recovery tax on unexplained wealth
Introduce a severe financial penalty, full forfeiture, and automatic, perpetual disqualification from public office for corrupt officials and beneficiaries.
9. Integrate carbon pricing into excise taxes
Promote environmental sustainability through tax design that discourages pollution while minimizing inflationary impact.
10. Replace BIR and Customs with a National Revenue Authority
Abolish both agencies and create a professionally managed National Revenue Authority (NRA) modeled after Singapore’s IRAS, insulated from political interference and powered by full digital, AI, and blockchain systems.
“High tax rates with weak enforcement punish honest taxpayers and small businesses while rewarding corruption,” Abrea added. “The answer is smarter taxation — not heavier taxation.”
Abrea argues that taken together, these reforms can reduce corruption, lower business costs, and position the Philippines as one of ASEAN’s most investment-ready economies.
INVITATION
Mon Abrea is available for media and podcast interviews, panel discussions, and policy briefings while in Manila.
Topics: tax reform, anti-corruption policy, OECD Global Minimum Tax, MSME protection, investment competitiveness, and fiscal modernization.
For interview or invitations, please contact: consult@acg.ph or +63 917 801 0191
Mon Abrea is a globally recognized tax policy expert and trusted advisor to policymakers, multinational corporations, and international investors. He is the Founder and Chief Tax Advisor of Asian Consulting Group (ACG), a leading tax and investment advisory firm headquartered in the Philippines with satellite offices in Singapore, Australia, and strategic markets in the United States and Europe. His work focuses on globally aligned tax reform, cross-border investment structuring, ESG-driven incentives, and technology-enabled tax administration.