The Bureau of Internal Revenue (BIR) is reaping the fruits of a balanced and aggressive approach to tax enforcement and taxpayer engagement under the leadership of Commissioner Romeo Lumagui Jr.—an approach that has resulted in tangible results and improved revenue collections.
This according to former BIR Commissioner Joel Tan-Torres, who in a series of columns said that under the leadership Lumagui, “the BIR has been fast in implementing innovations in tax administration and taxpayer engagements.”
Commissioner Lumagui’s approach, he noted, is distinguished by the use of both “hard” and “soft” measures.
Tan-Torres said the current BIR administration is capable of promoting principled tax planning while enforcing anti-avoidance measures.
Tan-Torres explained that the ‘hard’ measures “include the Run After Fake Transactions, aggressive filing of tax evasion cases in the Department of Justice, conducting regular raids on warehouses and establishments containing excisable products which taxes have not been paid, and other enforcement actions.”
Complementing these are Lumagui’s “soft” strategies such as “personally interacting with college students to introduce them early to learning about taxation, the formation of a multi-sectoral group consisting of private sector stakeholders and business groups that discusses regularly priority concerns and issues, introduction of new look BIR logo, expansion of e-services that facilitates the compliance of taxpayers, and the continued implementation of a customer satisfaction survey from taxpayers engaging with the BIR.”
The strategy appears to be paying off. In May 2025, the BIR collected ₱1.111 trillion (net of refunds), exceeding its target by ₱7.045 billion.
“This collection represents a 14.50 percent increase compared to April 2025. An outstanding performance for BIR and Commissioner Lumagui with his ‘hard’ and ‘soft’ approach in tax administration,” added the former business school dean.
The former BIR head also emphasized the need for robust frameworks in tackling tax avoidance, drawing parallels with international practice.
“In the United States, the Internal Revenue Service has long issued its General Anti-Avoidance Rules (GAAR) and enforced these through judicial precedents and Treasury Regulations,” he said, citing doctrines such as Substance Over Form, Economic Substance Test, Business Purpose Concept, and the Sham Transaction Principle.
He noted that the Philippines “has also adopted these same concepts and doctrines in the administration and interpretation of the Tax Code. As such, there are various tax assessments issued by the Bureau of Internal Revenue and jurisprudence from the Supreme Court and the Court of Tax Appeals where these issues are involved.”
Tan-Torres said that the current BIR administration was capable of promoting principled tax planning while enforcing anti-avoidance measures, and lauded Lumagui for exhibiting “the mindset and fortitude in combating tax evasion practices of [unscrupulous] taxpayers faking tax invoices, selling unpaid excise tax products, and tapping the services of conspiring tax practitioners in their illegal tax habits.”
He added that the BIR has the tools to implement the best practices necessary to promote principled tax planning practice and GAAR measures.
Tan-Torres is a former Commissioner of the BIR and previously served as Dean of the University of the Philippines Virata School of Business. He also chaired the Professional Regulatory Board of Accountancy and was a tax partner at both Reyes Tacandong & Co. and SyCip Gorres Velayo & Co. A Certified Public Accountant who topped the May 1979 CPA Board Examination, he now runs his own tax and consultancy practice.
