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Transparency and Accountability Network (TAN) October 2006
“The views expressed in this report are strictly those of the authors and do not necessarily reflect those of the United States Agency for International Development (USAID) and the Ateneo de Manila University”.
PHILIPPINE TAXPAYERS ORGANIZATION (PT0) 1 (Revised Concept Paper) 2
The Philippine Taxpayers Organization believes that the taxpayers should have special interest in running government. Our tax payment is the main source of government income and about 80% of the government’s annual collection comes from our taxes. With the current tax system that is flawed with complicated regulations, burdensome documentary requirements, and undue exercise of discretion, the PTO believes that there is a need for a simplified tax system, wider and proper dissemination of relevant taxpayer and public information, and taxpayer education. The PTO shall educate the public on taxation and create venues for knowledge building on the issues concerning taxes. Through this, the PTO seeks to address external corruption with an informed taxpaying public intolerant of all forms of corruption. The PTO recognizes the need to promote a sense of “tax consciousness” among the Filipinos. It believes that every Filipino should pay the correct amount of tax and caveat to this obligation is their right to be informed of government revenue collection, allocation, and actual expenditure. The PTO believes that taxpayer participation in improving tax administration is a strategic move towards an improved tax system. The PTO therefore shall establish participative mechanisms that will translate to a more transparent, accountable, and efficient tax system. Apart from these, the PTO shall provide the necessary assistance to taxpayers and advocate for the issues and concerns of the voiceless and defenseless stakeholders. The PTO shall be unbiased and non-partisan in doing its mission. It shall, at all times, maintain a credible and independent reputation. VISION: An empowered taxpayer who recognizes his duties and responsibilities to pay proper taxes and a government that collects and spends taxes efficiently, transparently and honestly. II. MISSION To serve as the voice of the defenseless and underrepresented taxpayers III. OBJECTIVES SHORT TERM (1-2 years) To build capacity for research To build up knowledge on the tax system and policies affecting the small and underrepresented taxpayers To initially engage with relevant government agencies and policy-makers To begin to build a modest-sized constituency of highly motivated taxpayers To build networks with other taxpayer groups
The results of the consultations and dialogues with various stakeholders during the first half of 2006 were already incorporated in this revised Philippine Taxpayers Organization concept paper. 2 With inputs from the November 16, 2006 PTO Meeting
MEDIUM TERM (3-5 years) To continue and expand research (include expenditure and budgeting) To promote tax consciousness and educated taxpayers on the basics of taxation To provide basic taxpayer services (e.g. How to Attain a TIN, How to Register a Small Business) To increase membership by at least 25% To be recognized as a credible and sober representative of taxpayers To effectively intervene in policy-making decisions and formulation LONG TERM (Beyond 5 years) To continue and expand research (include expenditure and budgeting) To provide the full range of taxpayer service (e.g. legal and technical assistance) To open membership to the broad taxpayer base To firmly establish the association’s reputation among the policy-makers, media and the general public IV. MANAGEMENT AND FUNDING The PTO shall have a Secretariat and Board of Trustees. Members of both shall not hold an elective position. This will ensure the fairness, objectivity and non-partisan nature of the organization. The Board of Trustees shall consult with a Board of Advisers. The members of the Board of Advisers shall be publicly recognized as non-political people of integrity, credibility, and adheres to the principles and core values of the PTO. The PTO shall be flexible in the way it sources its funding (e.g. membership fees, donations) except in ways where conflict of interest may arise and/or the source of the fund is known to come from criminal activities. V. MEMBERSHIP Initially, membership in the PTO shall be by invitation, specifically targeting individuals that adhere to the PTO’s core principles and values and are highly motivated and concerned on taxpayer issues. Eventually, membership shall open up to all taxpayers determined as small and underrepresented by the PTO Board of Trustees. A Tax Identification Number is a requirement for all the members of the PTO. Each member shall pay Php100 registration fee. VI. PROGRAMS The programs of PTO can be summarized under two headings: I. RESEARCH AND ADVOCACY The PTO, in consultation with various stakeholders, shall formulate a Taxpayers’ Bill of Rights and Responsibilities propose for the passage of such Legislation. (short term)
The PTO will create a database of information that shall include BIR issuances, amendments, and other relevant BIR policies that should be made public. The PTO will have a website that shall contain this database together with other relevant news and feature articles as well as BIR updates. The website shall also have a special section for taxpayer reports and complaints that the PTO shall review, consolidate, and submit to the Bureau for action. It shall also be the PTO’s responsibility to follow-up on these reports and provide the complainants with feedback and/or action undertaken by the Bureau (long term). The PTO shall do a review of the tax policies and propose amendments for simplification. In this regard, the PTO shall conduct continuous dialogues with the Bureau of Internal Revenue and Department of Finance. (medium term)
II. EDUCATION AND INFORMATION CAMPAIGN Media and Communications Strategy to get people to recognize their tax duties and responsibilities (short term) Conduct of Trainings and Seminars --The PTO shall conduct trainings and seminars on the basic principles of taxation, on specific rules and regulations, and BIR issuances (medium term) Taxpayer Assistance—the PTO shall offer taxpayer assistance through a Taxpayer Service and Information Desk that shall be present at BIR regional and district offices. The PTO shall also make available independent source of information on taxes and offer legal assistance to taxpayers. The PTO shall also entertain substantial taxpayer reports and complaints in all forms and forward such to BIR and demand action from the Bureau. (ongoing – project of FOCIG) (towards the end of medium term) Publications – The PTO will publish an academic journal and a newsletter publication. The academic journal shall contain research works of academics in the field of taxation and governance. The newsletter on the other hand shall be filled with tax-related tidbits that convey a message of fiscal concern as well as updates on new BIR issuances, amendments, and other relevant information. The said publication shall also feature all monitoring reports done by media and/or civil society watchdogs on government expenditure. All publications shall be made available in the PTO website. (medium term) Special campaigns – The PTO will launch a full-scale campaign involving press conferences, news releases, petitions, commentaries, public events, speaker tours and paid advertising on highly debated issues concerning taxpayers. (medium term) Hosting conferences – The PTO shall hold national and international conferences that will help in expanding the advocacy of the organization. These conferences shall likewise provide a venue for exchange of information on best practices and benchmarking purposes. (medium term to long term) News Conferences and Releases – At times, certain issues warrant special attention. When the situation arises, the PTO shall send out a new release or holds a news conference to get media and public attention. (emergency response – short term)
DRAFT (Non-Stock) BY-LAWS OF Pinoy Individual Taxpayers Organization (PITO), Inc.
ARTICLE I NATURE OF THE ORGANIZATION
The Pinoy Individual Taxpayers Organization (PITO) was formed primarily to provide the necessary assistance to taxpayers and advocate the issues and concerns of the small and underrepresented stakeholders in tax administration and tax policy. PITO recognizes the need to promote a sense of “tax consciousness” among the Filipinos. It believes that every Filipino should pay the correct amount of tax and caveat to this obligation is their right to be informed of government revenue collection, allocation, and actual expenditure. The PITO believes that taxpayer participation in improving tax administration is a strategic move towards an improved tax system. The PITO therefore shall establish participative mechanisms that will translate to a more transparent, accountable, and efficient tax system. The PITO envisions an empowered taxpayer who recognizes his duties and responsibilities to pay proper taxes and a government that collects and spends taxes efficiently, transparently and honestly. It shall work to provide the necessary assistance to taxpayers and advocate for the issues and concerns of the small and underrepresented taxpayers. The PITO shall be unbiased and non-partisan in doing its mission. It shall, at all times, maintain a credible and independent reputation. ARTICLE II GENERAL MEMBERSHIP Section 1. Composition PITO membership shall have the following classification of members: a. Regular members b. Associate members Members to the association can be either individual or organizational. Regular members are composed of individuals while associate members are composed of individuals and/or organizations.
Organizational members shall be represented by the duly authorized senior representative of the organization, hereinafter the Authorized Representative, with one or two alternate representatives, hereinafter the Alternative Representative(s). Section 2. Qualifications of Regular Members Applicants and members of the Pinoy Individual Taxpayers Organization adhere to the principles of PITO, and the rules and regulations of the association. Other criteria for acceptance of members in the Organization are as follows: a. Must have a Tax Identification Number b. Must adhere to the PITO Vision-Mission, Objectives, and Principles c. Must be recommended by two PITO members and confirmed by the Board of Trustees Section 3. Manner of Application The PITO Membership Committee will set the manner of applying and accepting applicants to the organization. Section 4. Membership Fees Membership fees in an amount to be set by the BOT shall be collected from each member every year. The annual membership fees are subject to change as deemed necessary by the Board of Trustees. Members will be consulted for any changes in the membership fee. Section 5. Rights of a Regular Member All regular PITO members shall have the following rights: a. To be eligible to any elective or appointive office of the association; b. To participate in all deliberations/ meetings of the general membership; c. To avail of all the facilities and services of the association; d. To vote on all matters presented before the general membership that are subject to voting; e. To recommend new PITO members; and f. To access all information available within the association Section 6. Duties and Responsibilities of a Member. All members shall have the following duties and responsibilities: a. To continually comply with all tax-related laws of the Republic of the Philippines;
DRAFT d. To obey and comply with the by-laws, rules and regulations of the Association that maybe promulgated from time to time; c. To attend meetings of the association; d. To pay membership dues and other assessments of the association; e. To support the objectives and adhere to the principles of the Association Section 7. Annual Meetings. An annual membership meeting will be held every March, wherein accomplishments made during the current year and plans for the following year shall be reported to the general membership. The association will observe fiscal year from January 1 until December 31 of each year. Section 8. Meeting Notices Notices of the time and place of annual, regular, and special meetings shall be communicated by the Secretariat via all communication modes at least ten (10) working days before the meeting. The notice of every special meeting shall state briefly the purpose or purposes of the meeting. Section 9. Conduct of Meetings General membership meetings shall be convened by the Secretariat and presided over by a member of the Board of Trustees, preferably the Chairperson. Section 10. Manner of Voting In cases where agreements have to be achieved during the meeting, each individual member represented in the General Assembly, is entitled to one vote. A regular member may send a proxy to any of the general membership meetings and such proxy is authorized to vote on behalf of the member. An alternative representative’s vote shall be considered valid unless otherwise revoked by the member concerned. Section 11. Suspension, expulsion, and termination of membership. Suspension, expulsion, and termination of membership shall be in accordance with the rules and regulations of the association.
ARTICLE III BOARD OF ADVISERS Section 1. Composition The Board of Advisers shall be composed of at least five (5) members identified by the Board of Trustees.
Section 2. Criteria for the Board of Advisers The Advisers must be Filipino citizen, of legal age and should have a good reputation as a taxpayer. He/she should be a person of integrity and with good moral character and should adhere to the principles of PITO. Also, each member of the Board of Advisers should not be facing any criminal cases. Section 3. Role of the Board of Advisers The Board of Advisers shall provide their technical expertise related to tax policies and tax administration issues, and shall advise PITO on various issues and advocacies. The Board of Advisers is automatically invited in the BOT meetings. Section 4. Term. All members of the Board of Advisers shall have a one-year term upon invitation by Board of Trustees.
ARTICLE IV BOARD OF TRUSTEES Section 1. Board of Trustees The corporate powers of the association shall be exercised, its business conducted and its property controlled by the Board of Trustees. Section 2. Qualifications The trustees to be elected must be Filipino citizens, of legal age and members in good standing. He/she should be a person of integrity and with good moral character and should adhere to the principles of PITO, as well as the rules and regulations of the association. Additional criteria for the selection of Board members are: a) Ability to represent/articulate PITO’s agenda vis-à-vis government, media, and other stakeholder groups b) Availability of time to be devoted to PITO executive matters c) Elected in their individual capacity composition Section 3. Disqualification of Trustees or Officers No member convicted by any legal court of an offense punishable by imprisonment, or holds any criminal or administrative case, or a violation of the Corporation Code of the
DRAFT Philippines committed within five (5) years prior to the date of his election or appointment, shall qualify as a trustee or officer. Section 4. Composition The Board of Trustees shall be composed of seven (7) members, who are elected by the General Membership. Section 5. Powers of the Board The Board shall exercise the following powers: a. Oversee the implementation of PITO policies b. In between General Assemblies b.1. Make final decisions on urgent issues b.2. Undertake preliminary work on framing and organizing issues for discussion during the next General Assembly c. Formulate or recommend proposals/resolutions to the General Membership on organizational issues and concerns d. Create committees and appoint heads of committees (i.e. membership and election committee, ways and means committee, media and public relations committee, research, education, and advocacy committee, etc.) e. Appoint an Executive Director and other key positions in the organization f. Ratify applications for PITO membership g. Exercise primary responsibility of representing PITO in press conferences, dialogues with government agencies, other stakeholders, and other such forums h. Oversee the implementation of PITO projects and activities Section 6. Election and Terms of Office The Board of Trustees shall be elected by the general membership in the following manner: a. Nominations made by the general membership b. Each member shall vote for seven nominees at most. Initially, the term of the top four (4) elected members shall be for two years while the term for the bottom three (3) shall be for one year, and until their successors are elected and qualified. After the initial election of the members of the BOT, the term shall be for two years. Section 7. Meetings The Board of Trustees (BOT) shall meet once a month, or at any other frequency deemed necessary by the BOT, to discuss business arising from committee activities as well as organizational matters. Special meetings may be called by the Chairman through the Secretariat in the event that urgent issues arise requiring immediate attention of the Board.
DRAFT Section 8. Quorum A quorum for any meeting of the members shall consist of a simple majority of the members and a majority of such quorum may decide any question at the meeting. If no quorum is constituted, agreements reached during the meeting shall be presented to the General Membership via email. If no objections are raised within five (5) working days, agreements shall be considered ratified except those matters where the Corporation Code requires the affirmative vote of a greater proportion.
ARTICLE V THE OFFICERS Section 1. Officers The officers of the association shall be composed of a Chairperson, a Vice-Chairperson, a Secretary, and a Treasurer and shall be elected by the Board of Trustees from among themselves. The Secretary need not be a member of the BOT. Section 2. Election and Terms of Office All officers of the association shall hold office for one year and until their successors are duly elected and qualified. All positions shall be voted upon by members of the Board of Trustees. ARTICLE VI FUNCTIONS AND POWERS OF THE BOARD OFFICERS Section 1. Chairperson The Chairperson shall be the Chief Executive Officer of the association. He shall preside in all meetings of the members of the association and the Board of Trustees. Other responsibilities of the Chairperson include:
• • • •
Overseeing the conduct of the Association’s business; Overseeing and reviewing the Association’s strategic direction and objectives; Monitoring the Association’s accounting and financial reporting practices and reviewing the Association’s financial and other controls; Overseeing the Association’s compliance with applicable laws and regulations
Section 2. Vice-Chairperson
DRAFT The Vice-Chairperson shall exercise all powers and perform all duties of the Chairperson during the absence or incapacity of the latter and shall perform duties that maybe assigned by the Board of Trustees. Section 3. Secretary The Secretary shall give all notices required by these by-laws and keep the minutes of all meetings of the members and the Board of Trustees in a book kept for that purpose. He shall keep the seal of the association and affix such seal to any paper or instrument requiring the same. He shall have custody of the members’ register and the correspondence files of the association. He shall also perform all such other duties and work as the Board of Trustees may from time to time assign to him. Section 4. Treasurer The Treasurer shall have charge of the funds, receipts, and disbursement of the association. He shall also perform such other duties and functions that may be assigned to him from time to time by the Board of Trustees. Section 5. Auditor The Auditor has the following responsibilities:
• • • •
Regularly report to the BOT the financial status of the Association; General accounting and financial reporting; Preparation of the Association’s final annual budget and annual financial statements; Conduct professional internal and external compliance and performance audits
ARTICLE VII SECRETARIAT Section 1. Appointment and Composition The Board of Trustees shall appoint the Executive Director. The Secretariat shall be composed, at the minimum, of the following full-time staff: a. b. c. d. Executive Director Project Coordinator (2) Research and Advocacy Officers Finance and Administrative Officer
Section 2. Functions
The Secretariat shall perform the following duties and responsibilities: a. Provide technical and administrative support to the General membership, Board of Trustees, Board of Advisers, and other committees b. Serve as a venue and mechanism for the sharing and exchange of information related to tax administration issues and concerns c. Attend and document meetings d. Coordinate with the members on the conduct of various PITO activities e. Perform other functions that may be assigned from time to time by the BOT Section 3. Functions of the Executive Director The Executive Director shall perform the following duties and responsibilities: a. Oversee day-to-day operations of PITO b. Support operations and administration of Board by advising and informing Board members, interfacing between Board and staff, and supporting Boards evaluation of Executive Director c. Recommend yearly budget for Board approval and prudently manages the Association’s resources within those budget guidelines according to current laws and regulations d. Effectively manage the human resources of the Association according to authorized personnel policies and procedures that fully conform to current laws and regulations e. Assure the Association that its mission, programs, products and services are consistently presented in strong, positive image to relevant stakeholders f. Oversee fundraising planning and implementation, including identifying resource requirements, researching funding sources, establishing strategies to approach potential donors, submitting proposals and administrating fundraising records and documentation g. And such other duties and responsibilities that may be determined by the Board of Trustees ARTICLE VIII FUNDS Section 1. Funds: The funds of the association shall be derived from annual dues, grants, gifts, or donations. No part of the income which the association may obtain as an incident to its operation shall be distributed as dividends to its members, trustees, or officers. Section 2. Disbursements: Withdrawals from the funds of the association, whether by check or any other instruments shall be signed by the Treasurer and countersigned by the president. If necessary, the Board of Trustees may designate other signatories.
DRAFT Section 3. Fiscal Year: The fiscal year of the association shall be from January 1st to December 31st of each year.
ARTICLE IX OFFICES Section 1. Location The Secretariat Office will be located at Ateneo Center for Social Policy and Public Affairs Building, Social Development Complex, Ateneo de Manila University, Loyola Heights, Quezon City serves as PITO Principal office until such time that PITO is able to fully support its operations.
ARTICLE X AMENDMENT OF THE BY-LAWS Section 1. Amendments These by-laws, or any provision thereof, may be amended or repealed by a majority vote of the members. Adopted this ______ day of ___________________ in ___________________________ ________________________________________________________________________ By the affirmative vote of the undersigned members representing a majority of the members of the organization in a special meeting held for the purpose. ____________________ ____________________ ____________________ _______________________ _______________________ _______________________ __________________ __________________ __________________