DoF says BIR, BoC digitalization efforts boosted tax administration

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THE EFFORTS of the Bureau of Internal Revenue (BIR) and Bureau of Customs (BoC) to digitize their processes helped them improve tax administration, Finance Secretary Carlos G. Dominguez III said on Thursday.

“On the part of the Department of Finance, our revenue agencies have fully embraced digitalization. Through the help of the private sector, we have set up a number of e-payment and e-filing channels to improve tax collection and administration, curb corruption, and strengthen the business climate in the country,” he said in his speech at an online forum on Thursday.

The BIR collected P1.034 trillion in the first half, exceeding its target for the period by 1.61%. Meanwhile, Customs also exceeded its P291.833-billion goal for the first half by 3.7% after collecting P302.74 billion.

Mr. Dominguez said the improved electronic platforms of the BIR allowed almost 100% of taxpayers to file their annual income tax returns (ITRs) online. In 2015, only 10% of tax returns were filed electronically, he said.

BIR data showed 1.43 million ITRs were filed electronically this year to account for 99.5% of total returns, up from 89.99% in 2020 and 80.38% in 2019.

The surge in online filings started even before the pandemic, with the number of electronic filings growing from just 58.25% of total ITRs in 2018, 51% in 2017-2016, and 10% in 2015.

Aside from ITRs, the BIR also allows electronic filing for other major tax types like value added tax (VAT) and percentage tax. It also offers online payment channels via the Development Bank of the Philippines’ PayTax Online, Land Bank of the Philippines’ Link.Biz Portal, UnionBank of the Philippines, Inc.’s online web and Mobile Payment Facility, and via mobile wallets GCash and PayMaya.

“The Bureau of Customs, for its part, recently launched the Philippine Customs Modernization Project supported by the World Bank. This is a major step towards aligning our processes and standards with the best customs services in the world,” Mr. Dominguez said.

The BoC launched the P5-billion project in March aiming to automate its processes to improve its tax administration, boost collection, enhance trade facilitation, and lower trade costs.

Moving forward, the Finance chief said the government is still working on other programs to achieve its target to fully digitalize country’s tax system.

He said the United States Trade and Development Agency is helping the BIR roll out digital reforms, while South Korea is assisting in the bureau’s plan to set up an electronic invoicing system.

The government is also considering to replicate Russian Federal Tax Service’s VAT monitoring and collection scheme to help the BIR achieve “world-class tax administration.”

“In our digitalization efforts, we always encourage close collaboration with the private sector. We believe that the private sector’s expertise and initiative to adopt digital innovations will help us anticipate the changes in the digital economy. The private sector can help us provide a more nurturing policy environment for fintechs,” Mr. Dominguez said. — Beatrice M. Laforga

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