But another reform has taken place without much fanfare: the change in syllabus for the Certified Public Accountant (CPA) board examination.
Under the old syllabus, Business Law and Taxation (BLT) were taken as one subject of the seven areas covered by the exams. But starting next year BLT will be split into two independent subjects: Taxation, and Regulatory Framework for Business Transactions, each with a weight equal to the six other subjects. The revised syllabus will be implemented in the May 2016 CPA board examination.
What makes the reform compelling is the inclusion of additional topics, namely: Taxation in the Local Government Code, Fiscal incentives vested the Philippine Economic Zone Authority and Board of Investment enterprises, availment of Tax Treaty Relief, the Senior Citizen Law, and the Magna Carta for Disabled Persons. These changes will make future accountants more conversant and knowledgeable about the tax rules.
I have been in tax practice for almost a decade and with the academe handling taxation subjects for six years. I would say that there is a huge gap between subjects taught in school and actual work in tax practice. The inclusions of new topics could offer an opportunity to expose aspiring CPAs to issues relevant to actual practice.
Taxation is a very dynamic discipline, because of constant changes to the rules and regulations. Each year, the Bureau of Internal Revenue (BIR) averages about 130 revenue issuances. The table below provides a summary for the last five years:
While the reforms are welcome, it is also important that the review of the syllabus be done at regular intervals to adapt to the changes in the business world.
The challenge that comes with the reform in the tax syllabus to be implemented by the Board of Accountancy is how the Academe (which should include the review schools) will adapt to the significant developments and still continue to provide quality instruction material in less than two years.
Furthermore, I noted that Taxation is one of the least favored subjects among the accounting students. For this reason, the instructional design must also help increase the interest of these students in the subject matter.
Since taxation is a combination of the legal and accounting disciplines, the subject is considered tough. Thus, the materials to be developed must remain authoritative while innovating to make learning easy.
So what will constitute good material for academic purposes?
First, all the related provisions of the Tax Code must be covered. These must be explained from a business perspective. The rationale of the related provisions must be covered in the discussion. The potential grey areas must be raised and put in their proper context to minimize erroneous interpretation.
Second, discussions should be illustrated with the most recent court decisions, Bureau of Local Government Finance rulings and BIR rulings. This way the discussions would be more practical and provide better insight into the tax process.
Last, discussions should examine not only the tax implications, but also the impact on the accounting side. It must show how to reconcile the differences both in the tax and accounting treatment of a particular transaction.
I look forward to the tax materials being developed for academic purposes. They must be practical and easily understandable. It is also my hope that the changes in the CPA course syllabus in Taxation will continue to strengthen the analytical skills of our future professionals. The reforms should also prepare them to face challenges in the actual practice of taxation.
Finally, I see reforms to the tax syllabus making young accountants more inclined to join the tax practice. The new breed of tax professionals should not only be able to provide potential tax-saving advice to the company, but also ensure that the company or taxpayer-client is compliant with the rules.
Richard R. Ibarra is a tax manager with the Tax Advisory and Compliance division of Punongbayan & Araullo. P&A is a leading audit, tax, advisory and outsourcing services firm and is the Philippine member of Grant Thornton International Ltd.
The challenge that comes with the reform in the tax syllabus to be implemented by the Board of Accountancy is how the Academe (which should include the review schools) will adapt to the significant developments and still continue to provide quality instruction material in less than two years.
Furthermore, I noted that Taxation is one of the least favored subjects among the accounting students. For this reason, the instructional design must also help increase the interest of these students in the subject matter.
Since taxation is a combination of the legal and accounting disciplines, the subject is considered tough. Thus, the materials to be developed must remain authoritative while innovating to make learning easy.
So what will constitute good material for academic purposes?
First, all the related provisions of the Tax Code must be covered. These must be explained from a business perspective. The rationale of the related provisions must be covered in the discussion. The potential grey areas must be raised and put in their proper context to minimize erroneous interpretation.
Second, discussions should be illustrated with the most recent court decisions, Bureau of Local Government Finance rulings and BIR rulings. This way the discussions would be more practical and provide better insight into the tax process.
Last, discussions should examine not only the tax implications, but also the impact on the accounting side. It must show how to reconcile the differences both in the tax and accounting treatment of a particular transaction.
I look forward to the tax materials being developed for academic purposes. They must be practical and easily understandable. It is also my hope that the changes in the CPA course syllabus in Taxation will continue to strengthen the analytical skills of our future professionals. The reforms should also prepare them to face challenges in the actual practice of taxation.
Finally, I see reforms to the tax syllabus making young accountants more inclined to join the tax practice. The new breed of tax professionals should not only be able to provide potential tax-saving advice to the company, but also ensure that the company or taxpayer-client is compliant with the rules.
Richard R. Ibarra is a tax manager with the Tax Advisory and Compliance division of Punongbayan & Araullo. P&A is a leading audit, tax, advisory and outsourcing services firm and is the Philippine member of Grant Thornton International Ltd.
source: Businessworld
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