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Digitalisation the Main Driver in Philippine Tax Collection

Image credit: pna.gov.ph

Taxes lies at the heart of a government’s ability to function. Being able to collect needed taxes allows the administration to be the well-oiled machine that it can serve its people. This is why digitalisation has played a pivotal part in the country’s Bureau of Internal Revenue (BIR) ability to collect and ensure quality service to the Filipino nation even at the height of the pandemic.

As reported, BIR’s timely digitalisation transformation (DX) programs, complemented by its growing workforce of young and skilled professionals under the current administration, enabled the agency to steadily improve its collection performance and broaden the taxpayer base in 2021.

We can attribute our improved performance to our DX programs as well as to our increasing number of young workers who are quicker and more adept at learning digital skills.

– Caesar Dulay, Commissioner, Bureau of Internal Revenue

In his report to Finance Secretary Carlos Dominguez III, BIR Commissioner Caesar Dulay said 4.63 million business taxpayers were registered last year despite the pandemic. This represented a 5.14% increase from the previous year’s 4.41 million registered businesses. The BIR’s collection steadily grew from PHP 1.58 trillion (USD 29,946,940,800) in 2016, to PHP 1.78 trillion (USD 33,737,692,800) and PHP 1.96 trillion (USD 33,737,692,800) in 2017 and 2018, respectively.

Dominguez congratulated Dulay and the rest of the BIR.

You have done a great job, particularly in introducing digital technology, which has really helped continue the tax collection effort, especially during the pandemic.

– Carlos Dominguez III, Secretary, Department of Finance

At the onset, the virus stifled the collecting body, making the highest numbers in the pre-pandemic year of 2019, when collections amounted to PHP 2.19 trillion (USD 41,508,734,400), before dipping to PHP 1.96 trillion (USD 41,508,734,400) at the height of the coronavirus disease 2019 (COVID-19) global outbreak in 2020. However,  these numbers climbed back to PHP 2.08 trillion (USD 39,423,820,800) in 2021, thanks mainly to digital initiatives.

With the BIR expanding the use of digital payment channels to settle tax dues, about PHP 1.75 trillion (33,169,080,000) or 84% of the PHP 2.08 trillion (USD 39,423,820,800) tax collection last year was collected electronically. The number of electronically filed tax returns of 23.78 million made up 93% of the 25.66 million filed returns in 2021. New business registrations can now be done through the BIR’s web-based portal https://www.bir.gov.ph/newbizreg/ launched on June 1, 2021.

The  BIR has also put in place its online application for tax clearance for bidding purposes and tax compliance verification certificate; the e-Personal Equity and Retirement Account System; and its eAppointment, which received around 90,000 bookings from May to December last year.

It has also improved its Electronic Filing and Payment System (eFPS), Electronic Fund Transfer Instructions System (eFTIS), and other e-payment channels to make it easier for taxpayers to pay taxes online.

Digital transformation is causing positive change to ripple through the country. The CREATE Law has been set in motion to usher in new digital technology investments in the country as reported on OpenGov Asia. The nation’s chief justice is seeking a tech-enabled justice system in the future.

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