Should the BIR and Customs be replaced by one National Revenue Authority?

“Maybe the very people that we hope will help us reform it have been eaten up by the system, that even if you put a saint at the helm of power, he will be, if not corrupted, he will be helpless.”

That is how tax expert Mon Abrea, chairman and CEO of Asian Consulting Group, explained why he wants to replace the Bureau of Internal Revenue (BIR) and the Bureau of Customs (BOC), in a video posted on the Facebook page of Prof. Cielo Magno. In February 2026, Abrea pushed the proposal together with Magno, a former Finance undersecretary: one agency called the National Revenue Authority (NRA).

Watch our video explainer on Facebook (in Filipino).

Two agencies, one authority

Today, the BIR collects the tax on income, the value-added tax (VAT) and other taxes, while the BOC collects taxes and tariffs on imports. Both are under the Department of Finance (DOF), and each runs its own system and keeps its own data.

The proposal would put both jobs in one agency, with one system and one set of data. According to Abrea, the NRA would be run like a government-owned and -controlled corporation (GOCC), with professional management, so that tax collection is protected from interference by politicians. The plan also calls for a digital system, with AI and blockchain in tax and customs, according to a graphic by Abrea’s firm, the Asian Consulting Group, and a BusinessWorld report on February 9, 2026.

Why now?

The proposal came out while the Senate was investigating alleged extortion using the Letter of Authority (LOA), the document that starts a BIR tax audit. Sen. Erwin Tulfo alleged that LOAs were used for extortion, The Philippine Star reported on November 24, 2025. The Senate Blue Ribbon Committee held hearings on the alleged abuse, and on February 10, 2026, GMA News reported that the BIR had filed cases against 25 of its personnel for misuse of letters of authority.

Why it matters: almost 92% of the government’s revenue

These two agencies collect the tax on income, the VAT on what we buy and the taxes on imported goods. Together, they are expected to bring in almost 92% of the government’s revenue this year.

Under the revised 2026 targets of the Development Budget Coordination Committee (DBCC), the government aims to collect ₱4.807 trillion. Of that, ₱3.393 trillion is expected from the BIR and ₱1.011 trillion from Customs, according to reports by BusinessWorld and The Philippine Star on July 10, 2026. Other revenue makes up the remaining ₱0.403 trillion.

By our computation, the two agencies’ targets add up to 91.6% of the total: (₱3.393 trillion + ₱1.011 trillion) ÷ ₱4.807 trillion.

The model: Singapore

The model Abrea and Magno point to is Singapore. In 1992, Singapore turned its Inland Revenue Department into a statutory board, the Inland Revenue Authority of Singapore (IRAS), so it could attract and keep capable staff, according to the IRAS 20th Anniversary Special Feature (p. 2). By 2012, 97% of individual income taxpayers in Singapore filed online (pp. 27 and 28).

But IRAS handles only taxes. Singapore Customs is a separate department, under the Ministry of Finance since April 1, 2003, according to the National Archives of Singapore. The NRA proposal goes further than Singapore did, by putting taxes and customs in one agency.

Not a new idea

Since 2002, at least 8 bills have been filed in Congress to replace the BIR with a revenue authority. None of them became law.

At the Pandesal Forum at Kamuning Bakery Cafe in Quezon City on February 17, 2026, covered by News5, Abrea said they already have a draft bill. But as of October 26, 2026, Pinoytrend has not found a new NRA bill filed in the current 20th Congress.

The BIR: a last resort

For BIR Commissioner Charlito “Charlie” Mendoza, an NRA should be a “governance reform of last resort, not a first response,” BusinessWorld reported on February 10, 2026. He said it could still be discussed in the long term. According to the BIR, the problem is the quality of governance (integrity, accountability and data), and not only the structure of the agency.

Mixed results abroad

Results in other countries are mixed. A 2006 working paper of the International Monetary Fund (IMF), by Kidd and Crandall, noted that at the time there was still no objective evaluation showing that countries with revenue authorities perform better.

In Trinidad and Tobago, the tax board and customs were also supposed to be merged into one revenue authority, like the NRA. But the law was repealed in 2025, through the Trinidad and Tobago Revenue Authority (Repeal) Act, 2025, before the authority could fully operate. Only 32.6% of employees had shown interest in moving to it, according to Prime Minister Kamla Persad-Bissessar.

So, is a new name enough?

The NRA would give the BIR and Customs a new name and a new structure. But the BIR says the problem is not only the structure; it is also the quality of governance. So the question is: is a new name and structure enough, or do the people inside need fixing first?

Mga Resibo (Sources)

1. Inland Revenue Authority of Singapore, “IRAS 20th Anniversary Special Feature,” pp. 1, 2, 27 and 28.
2. National Archives of Singapore, agency records: Inland Revenue Authority of Singapore and Singapore Customs.
3. Senate of the Philippines, Legislative Digital Resources: HB 5465, HB 276, HB 1600, SB 1327, SB 1752, HB 6007 and SB 2270.
4. P&A Grant Thornton, “Rebirth of the tax system,” April 11, 2017 (on HB 695).
5. Kidd and Crandall, “Revenue Authorities: Issues and Problems in Evaluating Their Success,” IMF Working Paper 06/240, 2006.
6. Parliament of the Republic of Trinidad and Tobago, The Trinidad and Tobago Revenue Authority (Repeal) Act, 2025.
7. Ministry of Finance, Trinidad and Tobago, October 23, 2017.
8. Pandesal Forum, Kamuning Bakery Cafe, Quezon City, February 17, 2026 (News5 coverage).
9. Video of Mon Abrea and the Asian Consulting Group graphic of the NRA proposal, posted on Prof. Cielo Magno’s Facebook page.

From news reports:

• BusinessWorld, “National Revenue Authority touted as possible BIR, BoC replacement,” February 9, 2026.
• BusinessWorld, February 10, 2026, on Commissioner Mendoza’s comments.
• BusinessWorld and The Philippine Star, July 10, 2026, on the DBCC’s revised revenue targets: “DBCC trims revenue goals” (BusinessWorld, via Metrobank Wealth Insights) and “Government recalibrates BIR, BOC collection targets” (The Philippine Star).
• The Philippine Star, November 24, 2025, on Sen. Erwin Tulfo’s allegation.
• GMA News, “BIR files cases vs. 25 personnel for misuse of letters of authority,” February 10, 2026.
• Trinidad Express, 2025, on the repeal of the revenue authority.

Photos: Mon Abrea’s website (Abrea) and Governance Action Hub (Magno). Graphics: Pinoytrend.net, from our video explainer. Map data: Natural Earth.