“Ignorance is bliss, 'tis folly to be wise.” So says Thomas Gray. However, this is hardly ever the case taxwise: in the matter of taxes, the more knowledge one has, the more equipped is that person to make informed decisions – life and business. In today’s era of COVID-19, modern-day technology has made strides in terms of educational access for students, doing business with clients and collaborations with colleagues at the comfort of our homes. As people take the reins of technology to go through their daily lives, the Bureau of Internal Revenue (BIR) has also taken steps to embrace modernization by revamping their systems and processes into more digitalized, seamless ones.
Social networks create a prime avenue for education and information campaigns because of its large user base. Hence, in line with Revenue Memorandum Circular (RMC) No. 23-2021, “CY 2021 BIR Priority Programs and Projects”, for citizens to be informed about taxation and to be updated of the latest developments in the tax administration, the BIR has released accessible and downloadable tax awareness and educational videos through their Facebook page and YouTube channel to be plugged in other social media platforms to reach organizations, learning institutions, and taxpayers.
The videos sketch the BIR’s history, guides how to get in touch with them, and lectures about taxes, the requirements and procedures in registration, filing, and payment.
One of the videos, “BIR: ALL ABOUT TAXES”, discusses the different tax types imposed under the Tax Code and the systems through which taxes are collected by the BIR. In view of the technical nature of taxes, there is a need for taxpayers to see at a glance and in layman’s terms the various types of taxes they are exposed to. In addition, the video also provided a briefer on the registration process with the BIR.
The videos also tackled the importance of paying taxes and the BIR’s tax enforcement activities such as Run After Tax Evaders (RATE) Program, Oplan Kandado, the BIR Strike Team and the POGO task force, all of which aim to promote the compliance of taxpayers and increase revenue collection. Along with this BIR’s tax public awareness programs in the CY 2021 Priority Programs and Projects comes the digital transformation of tax administration.
It can be recalled that back in 2020, the BIR issued Revenue Memorandum Order (RMO) No. 27-2020, “BIR Digital Transformation (DX) Roadmap 2020-2030”, in compliance with Republic Act (RA) No. 11032, otherwise known as the “Ease of Doing Business and Efficient Government Service Delivery Act of 2018”. The RA mandates all government offices and agencies for the assessment and improvement of their transaction systems and procedures thereafter reengineering them if deemed necessary. In addition, their business-related transactions shall be automated through the development of accessible, web-based software and technology-neutral platforms in collaboration with the Department of Information and Communications Technology (DICT).The DICT shall also be responsible in establishing, operating and maintaining a Central Business Portal (CBP) – an online system which serves as a central system in receiving and capturing applications and data involving business transactions from different government agencies including the BIR. Last January, the CBP was relaunched as a project under the Anti-Red Tape Authority (ARTA) as per RMC No. 15-2021.
The reengineering calls to reduce the processing time in transacting with government offices and agencies through the digitalization of the manual processes; and to eliminate the bureaucratic red tape – systems that are detrimental to the realization of the BIR’s mission.
With this call for reengineering, the DX Roadmap outlines the programs and corresponding outcomes that shall abet the BIR’s mission to reinforce revenue collections which further addresses the funds fundamental to the execution of the different programs and initiatives of the government. The framework is pillared on three principles: adopting a people first approach, instituting a process perspective, and embracing digital technology. Composed of the following four major programs and projects, the digital transformation shall be implemented in two phases: (1) Innovating TP Experience and BIR Service Processes; (2) Enhancing Administration and Support Services of BIR; (3) Aligning Policies to a BIR Digital Workplace; and (4) Enabling the Digital Backbone of BIR.
As a start-up, Phase I covers 2020 to 2023 wherein the BIR is set to build the DX foundation – integration of digital technology in its operations and services. By 2023, the DX Strategy Theme 1, “People first and elevated taxpayer experience” and Theme 2, “Anytime, Anywhere Taxpayer Service,” intends the BIR to expand its online presence and to be service-oriented. Some of the agency’s existing electronic transactions has made the filing and payment of taxes a breeze in the midst of the pandemic weighed down by quarantines and lockdowns. The new incoming 24/7 feature will make it even more convenient and accessible for taxpayers.
Currently, among the DX projects that are already being implemented are the TIN Verifier mobile app, online application for tax clearance for bidding purposes and tax compliance verification certificate (eTCBP/TCVC) and eAppointment. The BIR ought to program more digital processes such as the ePERA system which shall handle the issuance and monitoring of digital Personal Equity and Retirement Account (PERA) and Tax Credit Certificate (TCC), taxpayer registration mobile app, contact center solution with chat module where taxpayers may settle their queries 24/7, an enhanced eComplaint system, eReceipting/eInvoicing, etc. These projects are formulated to build a responsive IT architecture and infrastructure, thereby improving data sharing throughout the BIR organization.
While Phase I is focused on building the DX foundation, Phase II targets the strengthening of the DX in the BIR organization. Themes 3 and 4, “Strengthening the BIR Digital Organization & Infrastructure” and “Leveraging Taxpayer Data for Managing Tax Services”, respectively, would navigate the road to efficiency of the BIR’s internal processes and would foster a digitalized tax administration by 2030. “Human Resource Information System (HRIS)” and “Property and Accountable Forms Management” are two programs to be started soon that would automate and harmonize the human resource and inventory management of the BIR. There shall be continuous integration of digital technology in the BIR’s processes and consequently, being able to offer customized taxpayer services.
With all these projects that open new different channels for taxpayers and the BIR, the DX Roadmap includes the issuance and reformulation of BIR policies to provide and update guidelines and procedures in its enforcement.
“Continuous transformation is key in keeping pace with global trends. In the future, all transactions with our clients should be seamless and instantaneous,” said Carlos Dominguez, Secretary of Finance. As the BIR’s digital transformation advances, the more efficient its revenue collection system becomes. Consequently, there is an anticipated theoretical yield increase which is crucial to the recovery of the government from the adverse effects of the COVID-19 pandemic.
Erika Mae M. Malabana is an Analyst from the Tax group of KPMG R.G. Manabat & Co. (KPMG RGM&Co.), the Philippine member firm of KPMG International. KPMG RGM&Co. has been recognized as a Tier 1 tax practice and Tier 1 transfer pricing practice by the International Tax Review.
This article is for general information purposes only and should not be considered as professional advice to a specific issue or entity.
The views and opinions expressed herein are those of the author and do not necessarily represent the views and opinions of KPMG International or KPMG RGM&Co. For comments or inquiries, please email ph-inquiry@kpmg.com or rgmanabat@kpmg.com.