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Philippine Bureau of Internal Revenue to undergo digital transformation

The Bureau of Internal Revenue (BIR) confirmed that a grant agreement extended by the United States to the Philippine government for the BIR’s Information Communication Technology Modernization Strategy and Data Centre will provide much-needed financing assistance for its digital transformation ambitions. The agreement for the US$ 809,450 grant (equivalent to about PHP 38.85 million) was signed by the agency’s Finance Secretary for the Philippine government and by the US Embassy in Manila on behalf of the United States Trade and Development Agency (USTDA).

The US grant aims to assist the BIR in undertaking an in-depth technical assessment of its current ICT environment, developing an enterprise architecture roadmap/framework, and assessing the organisational framework of its Information System Group (ISG), including recommended restructuring and training programs. The grant will help the agency to be up to date with the rapidly advancing financial technologies. It can dramatically improve the agency’s organisational capacity and collection efficiency, improved performance, increased security, reduced costs, and greater transparency – all of which are not only vital to the BIR’s tax administration duties but are extraordinarily important in further strengthening the confidence of the public in its government institutions.

As a primary thrust of the government, the BIR’s digital movement will not merely involve the implementation of a state-of-the-art data management system, but this decision will also give the agency various cutting-edge technologies. The new applications will be used to achieve the best revenue performance. The digitalisation programme will be fully functional to ensure the agency’s much-improved services and highly efficient collection performance, the Finance Secretary stated and that the migration efforts to digital will be critical to the country’s sustainable recovery from the widespread effects of the COVID-19 pandemic.

The agency said that Covid-19 has underscored the importance of rapidly upgrading the country’s digital transactions system, as well as the government’s revenue collection effort, which was well into the process of digitalisation when the pandemic struck early last year. Now, additional electronic channels have made the filing and payment of taxes more accessible and convenient for taxpayers amid nationwide home quarantines and lockdowns brought by the pandemic.

As a result, total revenues collected through digital channels reached PHP 1.83 trillion in 2019, representing 84% of the total collections of the BIR for that year. The amount collected from digital payment systems in 2019 was 54% more than the sum collected through the same channels in 2015. Electronic tax filers were 58% of the total filers in 2019 versus 25% in 2015.

While revenue collections last year were understandably lower because of the pandemic-induced economic slowdown, the BIR still managed to improve its tax collection target using digital programs, platforms and other electronic means. In 2020, 85% or PHP1.66 trillion of the total collections of the BIR was coursed through electronic and digital channels which were 44% higher than in 2015.

The agency added that almost 100% of the tax returns filed were done online last year. They also added that the figures are projected to dramatically increase in the coming years as the BIR accelerates its digital transformation.

The agency believes that a highly efficient revenue collection system, therefore, is critical to help the agency and other sectors to recover strongly from the effects of the pandemic and build back the best possible future for its people. According to the agency, with this robust tax effort, it was able to sustainably fund the government’s flagship program “Build, Build, Build,” to provide more and better social services to the people and face the pandemic with strength on the fiscal front.


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