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Digital Tax Initiatives in the Philippines

The Bureau of Internal Revenue (BIR) of the Philippines has partnered with a private company that specialises in digital and IT transformation and governance services to study the current state of the Bureau’s ICT capability in terms of structure, manpower, and infrastructure and to recommend strategies and plans for the improvement of the Bureau’s core ICT systems and data centres.

This gives all of us the opportunity to build on the progress you have already made and to further strengthen tax administration through digitalisation. By doing so, we will not only make tax collection more efficient, but we will also significantly expand the tax base. This will help us increase the percentage of tax collections from voluntary payments versus tax collections paid after audits, which now stand at 97% and 3%, respectively. And, just as importantly, it will help us reduce the avenues for corruption and tax evasion.

– Lilia Catris Guillermo, Commissioner, BIR.

By using this digital switch, the BIR can keep developing IT systems simple while also keeping them in line with the demands of tax administration. An Enterprise Architecture Roadmap, on the other hand, will be created based on the findings of the gap analysis that will be conducted, and it will outline the numerous activities that the Bureau must carry out to move from its current condition to the desired future state.

To achieve operational efficiencies, cost optimisation, and service quality for the Computing Infrastructure Strategy, the BIR will put the best practices into effect and build operational governance policies and processes with a “cloud first” approach.

The BIR examines the impact on duties and new roles to be played in the context of the cloud infrastructure plan as well as the high-level technological requirements, which include data centre renovation and the use of a software-defined network platform.

The BIR was introduced to the Federated IT Model through a presentation on the Information Systems Group’s (ISG) Organisational Design and Change Management. A review of best practices for organisational design and change management, including the framework, methodology, approach, and deliverables during the Organisation Change Readiness Assessment, as well as the required key competencies and new types of positions for the “future state” ISG, was also conducted.

The BIR ICT Modernisation Programme is part of the Department of Finance’s (DOF) Technology Harmonisation and Modernisation Programme, which aims to establish common technological foundations and information exchange standards among the agencies overseen by the Department.

The Programme specifically seeks to standardise technology infrastructure, ensure system availability and uptime, improve service levels, and ensure business continuity and disaster recovery capabilities, allowing DOF agencies to produce real-time and accurate data on demand.

To speed up the Bureau’s ICT modernisation and rehabilitation efforts, BIR was also advised to form a strategic third-party partnership to manage and enhanced professional services in terms of managing cloud, cybersecurity, database administration, operational support administration, end-user support management, BIR Data Centre rehabilitation, operations and maintenance, among others,

After the implementation of the plans for the ICT transformation, the BIR is anticipated to finally become an organisation with a strong emphasis on data, as well as a wider revenue base and significantly higher effectiveness in tax collection.

Modernisation activities for the Bureau’s information and communications technology systems and infrastructure are in line with the ongoing implementation of the BIR Digital Transformation (DX) Roadmap for 2020-2030.

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