Bernardo M. Villegas
Recent Articles



Rebalancing Strategy
published: Mar 31, 2017



Articles  >> more topics
Social Enterprise in Tax Consulting

           Social entrepreneurship is getting more popular among the younger generation of entrepreneurs.  I have observed among graduates of the Entrepreneurship Management Program of the University of Asia and the Pacific an increasing trend for those starting businesses on their own to combine profit making with contributing to the solution of some societal problem.  There are the traditional consumer-oriented companies catering to the "bottom of the pyramid", i.e. selling basic consumer products to the D and E households.  There are businesses established to make a profit out of recycling garbage or cooking oil in order to attain a cleaner environment.  Others are marketing organic vegetables to improve the health of Filipinos.  Increasingly, profit is being combined with social objectives. As they used to say at the IESE Business School, where I taught as a Visiting Professor, "Doing Good While Doing Well."

          One of the young professors of UA&P has come out with a variation of social entrepreneurship.  Raymond Abrea, a C.P.A. and tax consultant, has put up with other young finance practitioners a consulting service that is directly helping the efforts of the Bureau of Internal Revenue to increase tax collections by "conscientizing" business people and professionals, especially among the small and medium enterprises, to pay the appropriate taxes they owe to the Government.  The Abrea Consulting Group (ACG) was incorporated as a social consulting enterprise which provides strategic finance and tax advisory services primarily to start ups, especially micro enterprises and SMEs, who are from the very beginning of their operations made aware of the tax obligations they will incur.  Included among their target clients are family businesses and even non-profit organizations which may have to pay taxes on some of their operations that are not within the scope of their tax-exempt status.  

          I take note of the statement of their corporate mission:  "As a social enterprise, we are a) advocating for a genuine tax reform to empower our micro, small and medium scale enterprises towards inclusive growth; b) providing training and opportunities to the marginal sector, including those in the informal sector, e.g. fixers, bookkeepers, etc.;  c) offering career options for BIR employees and retirees in supporting the blueprint for a genuine tax reform; and d) supporting the start ups, especially micro and social entrepreneurs through our strategic finance and tax advisory services."  These socially motivated consultants go out of their way to identify celebrities in the entertainment world, doctors, lawyers and other professionals usually notorious for tax evasion in order to educate them about the responsible way of handling their tax obligations and removing the fear of dealing with the tax authorities.  They discover that in many instances people have  the good intention of paying their appropriate taxes but have developed a phobia in dealing with BIR collectors because of rampant talks about corruption.  This does not mean that there no incorrigible tax evaders.  There are, however, many more business people who are well disposed to pay taxes, especially now that they perceive improving governance under the present Administration.  They see their taxes being properly used, for example, by a very competent and honest Department of Public Works and Highways.

          I encourage business professors teaching in our colleges and universities to incorporate in their respective subjects, whether in marketing, finance, production, people management or business policy, topics related to responsible behavior in the payment of appropriate taxes.  Rather than creating a separate subject on taxation, it would be more effective if it is the marketing professor who discusses the impact of the Value Added Tax on pricing policy or which marketing costs are tax deductible, etc.   By the same token, the Finance, Production, or People Management professors can make their students fully aware of the tax implications of alternative strategies and policies in the different functional areas.  Most important of all, the business policy professor can stress the importance of paying the appropriate taxes for good corporate governance.  All these have been well studied by the Abrea Consulting Group.  Those interested in these educational materials may contact consult.abrea@gmail.com.   For comments, my email address is bernardo.villegas@uap.asia