ACCOUNTS RECEIVABLE MANAGEMENT SYSTEM: A PROPOSAL TO INCLUDE
AUTOMATED ASSESSMENT TO REDUCE CORRUPTION, INCREASE REVENUE
COLLECTION AND PROMOTE COMPLIANCE FROM TAXPAYERS.
GRADUATE SCHOOL
MASTERS IN BUSINESS ADMINISTRATION
In final fulfillment of the requirements for
Managerial Accounting and Control
Prepared by:
Jeffrey Jan T. Peralta
Submitted to:
Prof. Edgel Earl A. Abear, CPA, DBA
INTRODUCTION
The Bureau of Internal Revenue is under the supervision and control of the Department
of Finance and its powers and duties shall comprehend the assessment and collection of
all national internal revenue taxes, fees, and charges, and the enforcement of all
forfeitures, penalties, and fines connected therewith, including the execution of
judgments in all cases decided in its favor by the Court of Tax Appeals and the ordinary
courts. The Bureau shall give effect to and administer the supervisory and police powers
conferred to it by this Code or other laws. (Section 2 of the National Internal Revenue
Code of 1997). BIR collects more than half of the total revenues of the government.
Accounts Receivable Management System (ARms) is a web-based system that
enables the establishment of accurate Accounts Receivable/Delinquent Account database
covering all concerned BIR offices for easy monitoring/tracking and timely generation of
the required correspondences and reports. The system likewise provides functionalities
for online generation of Tax Clearances requested by taxpayers who are participating in
government biddings and other purposes, the processing and monitoring of installment
agreements, actions on applications for compromise settlement/abatement, the
enforcement of summary remedies from issuance and execution of Warrant of Distraints
and Levy, as well as the disposition/auction of seized real/personal properties for
conversion into cash/revenues.
The Bureau of Internal Revenue (BIR) is among the topped on the list of the most corrupt
departments and agencies of the government, in a report released in 2019 by the
Presidential Anti-Corruption Commission (PACC).
Company are able to evade payment of billions of taxes that should have been collected
due to corruption in the bureau internal revenue. (Tax expert Mon Abrea)
Corruption has fierce impacts on economic and societal development and has permeated
through entire portions of society and the economy. Corruption is a complex social
phenomenon and the motivations to engage in corrupt behavior are multifaceted and is
the result of interactions at the micro-, meso-, and macrolevel (Bicchieri and Ganegonda,
2016; Dimant and Schulte, 2016)
There is a broad consensus that Information Communication Technology have the
potential to make a significant contribution to the fight against corruption. By facilitating
the flow of information between government institutions, between government and
citizens, as well as among citizens, new technologies can promote transparency,
accountability and civic participation (Chene, 2011).
There are numerous ways in which Information Communication Technology can trigger
positive change: by reducing the asymmetries of information between public officials and
citizens; limiting the discretion of public officials; automatizing processes, cutting out
intermediaries, and reducing red tape and bureaucracy. (Zinnbauer, 2012).
THEORETICAL & CONCEPTUAL FRAMEWORK
Input
ALLEGATIONS OF CORRUPTION AND UNATTAINED
COLLECTION TARGETS DUE TO VULNERABILITY TO
CORRUPTION, BLOATED ASSESSMENTS AND
DISSATISFIED TAXPAYERS
Process
DESCRIPTIVE
STUDY
Output
PROPOSAL TO INCLUDE
AUTOMATED ASSESSMENT IN
ACCOUNTS RECEIVABLE
MANAGEMENT SYSTEM TO
REDUCE CORRUPTION,
INCREASE COLLECTION AND
PROMOTE COMPLIANCE FROM
TAXPAYERS.
RESEARCH DESIGN
The purpose of this study is to propose enhancement in Accounts Receivable
Management System (ARms) to promote transparency in the bureaucracy, reduce
vulnerability to corruption, encourage compliance from the tax paying public and
increase revenue collection for the interest of the government.
METHOD
This concept paper had utilized quantitative and qualitative research in collecting data.
Data were first obtained through researcher-made survey questionnaire. The survey was
participated by various delinquent taxpayers and conducted at the office during their
informal conferences with assign revenue seizure agents. Secondary data were based on
the report from Receivable Accounts Collection Enforcement Section. The report is based
on the number of taxpayers who’ve availed of compromise settlement on the grounds that
the assessment is doubtful in nature for the period October - December, 2019.
Survey Results
Statement
1. The office will automate the
assessment where it can be viewed
online.
2. The office respond to the needs of its
Response
Result
Pct.
Agee
24
96.0%
Disagree
0
0.0%
No Opinion
1
4.0%
Agee
2
8.0%
Disagree
23
92.0%
No Opinion
0
0.0%
Agee
18
72.0%
Disagree
3
12.0%
No Opinion
2
8.0%
client in a timely manner.
3. The office is highly vulnerable to
corruption due to its function.
Data Receivable Accounts Collection Enforcement Section
No of taxpayer who availed of compromise settlement
Doubtful
Financial
Validity
Incapacity
October
29 (26%)
November
Month
No Application
TOTAL
16 (14%)
67 (60%)
112 (100%)
21 (20%)
12 (11%)
74 (69%)
107 (100%)
December
27 (24%)
18 (16%)
68 (60%)
113 (100%)
TOTAL
77 (23%)
46 (14%)
209 (63%)
332 (100%)
PROBLEM STATEMENT
The issue is that Accounts Receivable Management System (ARms) only deals with the
assessment when it becomes delinquent and not while the investigation is on-going in
the respected Revenue District Offices. This means that the revenue officer will have the
freedom on how to go about the assessment and corruption may happen during this
process through bribery or extortion.
RECOMMENDATION
To include in the web-based system the computerized matching of taxpayers’ tax return
which will automatically generate an assessment including all penalties if there are any
discrepancies taxpayer returns/reports. The automated assessment will then be assigned
to a revenue officer for further verifications, review and provide updates online. The
taxpayer is also able to view the automated assessment online through a specific link to
check on updates that will be posted by the revenue officer assign to the case.