University of the Philippines economics professor Cielo Magno has questioned the purpose of the Bureau of Internal Revenue’s (BIR) mandatory QR-coded Registration Seal Badge, arguing that the requirement adds administrative burdens without clear evidence that it would improve tax compliance or revenue collection.
Magno welcomed the BIR’s decision to suspend the requirement under Revenue Memorandum Circular (RMC) No. 38-2026 until further notice, but said the policy lacked a clearly established public benefit.
“I support efforts to broaden the tax base, improve tax compliance, and ensure that businesses and individuals earning income through digital platforms pay the correct taxes. But regulations should serve a clear public purpose, and their benefits should justify the costs they impose on taxpayers,” said Magno, a former undersecretary of the Department of Budget and Management.
She argued that verifying taxpayer registration does not necessarily establish compliance with tax obligations, noting that the BIR already maintains registration records and has mechanisms to verify taxpayer status.
Electronic marketplaces and digital financial service providers are also subject to withholding and information-reporting requirements for certain transactions, she added.
“What additional tax administration problem does mandatory public posting solve? What evidence is there that it will improve revenue collection?” said Magno, who has also announced her intention to run as senator in the 2028 elections.
Without clear answers, she warned that the requirement could add another layer of bureaucracy rather than improve tax administration.
Magno also raised concerns that additional administrative requirements, uncertainty, and potential penalties could discourage microentrepreneurs, freelancers, and content creators from registering their businesses, particularly those with modest or irregular incomes.
“Instead of encouraging people to enter the formal economy, we risk giving them more reasons to remain outside it,” she said.
Sen. Bam Aquino also welcomed the suspension, calling on the BIR to continue listening to taxpayers and ease the burden of doing business, particularly for small entrepreneurs and online sellers.
“Maraming salamat, BIR, sa pagsuspinde ng Registration Seal Badge. Patuloy nating pakinggan ang hinaing ng ating kababayan at pagaanin ang pagnenegosyo, lalo na para sa maliliit na negosyante, content creator, at online seller,” Aquino said.
Magno’s criticism comes as the Philippine economy faces slower growth. Gross domestic product expanded by 2.3% in the second quarter of 2026, while the digital economy contributed P2.74 trillion, equivalent to 9.8% of GDP, in 2025.
Magno said the government should reduce unnecessary barriers to entrepreneurship and economic activity rather than introduce requirements whose economic and fiscal benefits have not been established.
She also flagged privacy and taxpayer-protection concerns, saying publicly accessible verification systems should not expose personal information unnecessarily.
Although replacing the public display of the full Certificate of Registration with a badge was an improvement, unclear rules and inconsistent enforcement could create opportunities for harassment, arbitrary penalties, and extortion, she said.
Magno further questioned the imposition of penalties for noncompliance when the relationship between displaying the badge and paying the correct taxes had not been established.
“We should not impose additional obligations on taxpayers merely because technology makes them possible. Digitalization must solve problems, not create new ones,” she said.
She said tax administration should instead be assessed through measurable outcomes, including increased voluntary registration, accurate income reporting, improved revenue collection, lower compliance costs, and greater taxpayer trust.
“Displaying QR codes online does not improve tax administration,” Magno said.
