U.S. funds BIR bid to digitize ops
Before the pandemic struck, the digital reforms instituted by the BIR led to significant improvements in the country’s tax effort
The government secured a grant from the United States Trade and Development Agency (USTDA) to support its efforts for a fully digital Bureau of Internal Revenue (BIR), its top revenue source.
Removing human contact on transactions is expected to make collections more efficient while greatly reducing irregularities.
The agreement constitutes an $809,450 grant or about P38.85 million, which will be used for the BIR’s Information Communication Technology Modernization Strategy and Data Center.
Finance Secretary Carlos Dominguez III expressed satisfaction over the development noting its alignment with the government’s thrust for the digital transformation of its main revenue agencies.
Agreement constitutes an $809,450 grant or about P38.85 million which will be used for the BIR’s Information Communication Technology Modernization Strategy and Data Center.
“Before the pandemic struck, the digital reforms instituted by the BIR led to significant improvements in the country’s tax effort. Tax revenues as a percentage of GDP (gross domestic product) rose to 14.5 percent in 2019 from 13 percent in 2015,” Dominguez said during the signing ceremonies for the grant agreement in Manila.
Best in 20 years
Dominguez described the revenue take as the best performance the government had in more than two decades.
Further, the Department of Finance chief cited that 84 percent or P1.83 trillion of the bureau’s total revenues in 2019 were coursed through digital channels, notably higher than the 54 percent recorded in 2015.
“There were already more electronic filers at 58 percent of all taxpayers in 2019 versus 25 percent in 2015,” he explained.
“Our experience during this pandemic underscores the importance of rapidly upgrading our digital transactions systems. Cashless payments zoomed over the past few months. Fortunately, our revenue collections system was well into the process of digitalization,” he added.
85% online payments
In 2020, tax collections through the BIR’s electronic channels inched higher at 85 percent despite the lower revenues as a result of the slowdown in economic activity.
The Cabinet official said that this figure was expected to improve in the coming years as the agency continues to accelerate its digital transformation efforts.
Still, Dominguez cited that some firms and individuals still prefer the old school method of filing taxes, taking the BIR a few steps away from achieving 100 percent on its digital tax collections.
“We’re close to 100 percent, but there will still be people and companies who will still want to file returns the traditional way,” he said.