The Bureau of Internal Revenue (BIR) has just made it easier for Filipino taxpayers to register and pay their taxes online.
In partnership with the Korea International Cooperation Agency (KICA), the bureau recently unveiled its Electronic Invoicing/Receipting System and Electronic Sales Reporting (EIS) system, which aims to make tax compliance easier and more convenient for taxpayers.
The electronic payment system forms part of the BIR’s digitalization program and will be implemented on a pilot basis starting in July this year.
It will allow taxpayers to issue electronic invoices and receipts, as well as store and process the required sales data, sales amount, buyer’s profile, and a lot of other information. The web-based system will also allow Filipino taxpayers to create their own sales data transmission and EIS certificate requests.
During its launch, the BIR said that it has already identified 100 companies (or those classified as large taxpayers) to join the pilot program. Many of these companies are engaged in e-commerce and in the export of goods and services.
“We expect the system to help improve tax administration and make tax compliance easier and more convenient for taxpayers,” said Finance Usec. Antonette Tionko, who heads the DOF Revenue Operations Group.
The new online system will help equip the BIR with a reliable set of sales data of companies and improve the bureau’s efficiency in auditing tax payment deficiencies. After its pilot testing, the BIR is also planning to expand the program to cover more companies and users in the coming months.
Kim Joejin, President of the Korea Institute of Public Finance, expressed optimism that the BIR’s EIS system will be successful and that the Philippine government will be able to use it as a test case to showcase how the digitalization of tax administration can support economic development.
Although private firms are already doing e-invoicing, this is the first time a system that connects to the BIR will be available.
EIS will enable the BIR to broaden its VAT revenue base and collect more revenues that can fund projects to create more jobs and attract foreign investments.
EIS will also cut tax compliance costs for millions of businesses. E-invoices are less prone to errors, prevent fraud and reduce processing costs.
Firms in the Philippines averaged 171 hours per year in tax compliance in 2018. EIS will reduce this by 80 hours per year, at par with Singapore in 2018.
The World Bank report Doing Business 2020 found that high tax compliance costs result in more corruption, and less investment. Online tax systems like EIS have a lower perceived level of corruption by removing the exchange of cash and personal interaction.
KOICA donated the software, and equipment comprised of servers, storage, training and support to the BIR through the Information Systems Group (ISG), headed by Officer-in-Charge (ACIR) Ma. Rosario Charo Curiba.