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To enable the government to meet people’s needs and maintain steady growth in the economy, the Bureau of Internal Revenue (BIR) must see sustained improvements through digitalisation, according to Finance Secretary Ralph G. Recto.
He noted that when fiscal targets are not met, it is the public that is affected. “Projects that would improve their lot today are denied of funding, creating a pile-up of debts that will be paid by our children tomorrow,” he said at the BIR’s 120th-anniversary event.
On the other hand, when revenue improvement is sustained, the needs of the people are met. Investments grow, which bolsters the economy and consequently creates jobs, improves income, and enhances people’s capacity to pay taxes. This “virtuous cycle” the government aims to keep going.
He said that digitalisation needs to be leveraged to make paying taxes easier. He referred to the BIR’s Digital Roadmap for 2024-2028, which serves as a guide on how to achieve their goal. He strongly believes that revenue can be increased through simplifying, shortening, streamlining, and speeding up the process, without leaving the government shortchanged.
He added that information technology must be implemented in the country as a form of liberation technology, which makes tax paying easier as complex payment processes discourage this. The BIR must continue to develop its technology and digitalisation initiatives and implement the Online Registration Update System, the Optimised Knowledge Management for Chatbot Review, and the Electronic One-Time Transaction System, among others to fortify the country’s information communication technology networks and infrastructure.
In addition, government agencies and departments need to strengthen their coordination by sharing data and establishing a “united front” to curb tax leakages and loopholes, he stated. The government recently launched the Swift Corporate and Other Records Exchange (SCORE) Protocol to facilitate prompt data-sharing and improve tax collection efficiency. It is a pilot project under the Securities and Exchange Commission (SEC) and the BIR and enables the Bureau to harmonise the records of registered corporations through a web portal.
SCORE allows the SEC to share its electronic database of corporate records with partner regulatory and enforcement agencies. Through a memorandum of agreement signed last month between the two agencies, the BIR became the first agency to access the portal. Among the corporate documents that the BIR can access in real-time through the portal are the Articles of Incorporation, General Information Sheet (GIS), and Annual Financial Statements (AFS). The SEC plans to onboard more financial regulators and government agencies into the SCORE portal.
The SEC also recently launched its third wave of digital initiatives under the Digital-All programme to improve the ease of doing business. This includes firstly, the Electronic Application for Modification of Entity Names and Data (eAMEND) portal, allowing the online acceptance, processing, payment approval, and issuance of the Certificate of Amendment of Domestic Stock and Non-stock Corporation. Secondly, the SEC Foreign Investment Registration Station (SEC FIRST) aids foreign corporations with licensing, registration, and monitoring. Thirdly, the Electronic Submission Authentication Portal (eSAP) to digitally authenticate SEC documents, and finally, the SEC Zuper Easy Registration Online (SEC ZERO), which allows applicants to digitally authenticate system-generated forms through eSAP.
A strong partnership between SEC and BIR will determine the success of the rollout of a proposed addition of value-added tax (VAT) on digital services. Recto noted that these systems, including other capacity-building measures, will allow for new tax laws in the future. Moreover, BIR should bolster its human capital through ongoing personnel training, updating equipment, increasing welfare measures, and making compensation adjustments.
The organisation is tasked with collecting PHP 3.05 trillion (US$52.8 billion) this year, or a daily collection of PHP 8.2 billion (US$141.9 million). This equals a capita revenue production per employee of PHP 191.5 million (US$3.3 million) annually, at least starting this year.
