Keeping our ships from sailing away

For many, it’s a sinking feeling that makes their stomach drop when they receive a government letter in the mail. A friend who runs a small manning agency told me that’s exactly what happens to his entire office — it’s like a wave of dread. The reason? A BIR “Letter of Authority” (LoA) had just landed.

Think of it as the taxman’s formal “knock on the door.” That piece of paper means the Bureau of Internal Revenue is officially coming to examine the company’s books. It’s not a casual inquiry; it’s an audit notice — and for any business that’s a big deal.

That collective office gulp is totally understandable. It means rolling up sleeves, gathering files, and preparing for a serious review — not exactly anyone’s idea of a good time.

According to a new study by the University of Asia and the Pacific (UA&P), it’s a massive economic risk. That sense of unpredictability around tax audits is pushing foreign shipowners to look elsewhere. And when they leave, they take a lot with them. 

We’re talking about an industry that fuels over P1.06 trillion in economic activity and nearly 400,000 jobs — from the seafarers themselves to the people in their hometowns who build homes, run schools, and open businesses with their remittances. 

It’s a quiet powerhouse that accounts for about four percent of our country’s Gross Domestic Product.

Powerhouses, however, need stability. The Philippines is already facing more competition for seafarer jobs globally. The last thing we need is to give shipowners another reason to choose Vietnam or India. 

The UA&P study hit the nail on the head — the problem is “arbitrary tax assessments.” When a company gets hit with a surprise, retroactive, or unclear tax bill — something Senator JV Ejercito and foreign investors have complained about — it doesn’t feel fair. It feels like a trap, and nobody wants to invest in a trap.

So, what’s the fix? The UA&P researchers suggest something beautifully simple: bring everything into the light. Make the tax audit process fully digital and transparent.

Instead of an anxiety-inducing paper letter, a company gets a secure online notification. All documents are uploaded to a portal. Most importantly, you could track the audit’s progress online, just like you track a Grab or Foodpanda delivery. 

You’d know who’s handling it, where it’s at, and what the clear rules and deadlines are. If there’s a disagreement, there would be a neutral panel to appeal to, without fear of making things worse.

Talk about fancy technology. It’s replacing fear with fairness. It’s giving businesses the clarity they need to plan and thrive. A digital, no-contact system certainly cuts out the grey areas where confusion and corruption can grow. It tells the world that the Philippines runs a clean, predictable shop.

The Department of Finance’s recent decision to temporarily halt these field audits was a good first step, but it only pauses a broken machine. Now we have to fix it for good.

Our seafarers are some of the best in the world. They face real storms on the open ocean to support our country. The least we can do is ensure the system back home that supports their industry isn’t another kind of storm altogether. 

By making tax audits digital and transparent, we’re both upgrading a government process and protecting the livelihoods of hundreds of thousands of families. 

The UA&P report warns in its closing line, “When confidence breaks — ships leave.” Let’s not let that happen. Let’s build a system that keeps our ships — and our economy — safely in port.