Full digitalization still a work in progress, says BIR
The Bureau of Internal Revenue (BIR) is unlikely to achieve a 99-percent digitalization rate this year as further system upgrades and fixes to technical limitations remain under way.
Speaking to reporters during the National Tax Campaign Kickoff, BIR Commissioner Charlie Mendoza said that the agency continues to address gaps in several online platforms, including the Online Registration and Update System, which he admitted still encounters intermittent technical issues.
But the tax chief assured the public that system improvements are ongoing, even noting that the agency has several digital initiatives in the pipeline, including partnerships with the Department of the Interior and Local Government (DILG) and the Department of Information and Communications Technology (DICT).
“Now we are working on linking our BIR e-services to the Electronic Business One-Stop Shop (eBOSS) of local government units,” Mendoza said, adding that the memorandum of agreement is expected to be finalized within the month, with rollout targeted as early as March.
The eBOSS is an integrated online portal used by local government units to process business permits and related clearances.
Once linked with the BIR online system, businesses applying for or renewing permits at the local level would be able to access tax-related services and compliance requirements more seamlessly.
Further, Mendoza added that newly launched digital tax calendar is expected to help taxpayers comply more easily with deadlines.
“The problem of the taxpayers is that they don’t know exactly the form that they will use. So now, they will just go to the calendar. When they see that the deadline is there, the form is also there,” he explained.
The calendar links due dates directly to the appropriate tax forms, simplifying compliance and minimizing filing errors.
Revenue pressures
Asked about possible revenue pressures, Mendoza said much would depend on the direction of tax policy reforms being considered by Congress.
Last week, the Organisation for Economic Co-operation and Development said the Philippines could keep debt levels manageable by broadening its tax base, including reforms to the value-added tax (VAT) system. Meaning, a broader tax base would require reducing VAT exemptions.
Should such proposals be adopted, Mendoza said collections would likely rise, noting that VAT already accounts for about 22 percent of the total revenues of the BIR.
“Of course, you know that it’s a legislation. So it depends on the wisdom of Congress. And we leave that to them. Usually, the role of the BIR is to give our comments and to provide them data,” he told reporters.
Meanwhile, Mendoza clarified that the BIR has no direct role in the collection of the travel tax, which is currently being proposed for abolition in Congress. The levy is administered by the Tourism Infrastructure and Enterprise Zone Authority, not the tax agency.
However, he acknowledged that removing the travel tax might mean that the BIR would have to augment possible losses through increasing revenue targets.
“That’s the life of the BIR. Every year, revenues are increased,” he added.
