Philippines digitalising tax administration to increase efficiency

Philippines digitalising tax administration to increase efficiency
Lilia Catris Guillermo, BIR's Commissioner

To improve ICT infrastructure.

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The Bureau of Internal Revenue (BIR), Philippines has partnered with a private management consulting firm, Avasant to digitise the Bureau’s Information and Communications Technology (ICT) systems and infrastructure.

BIR's Commissioner, Lilia Catris Guillermo, said the digital transformation of operations will provide opportunities to strengthen tax administration.

Avasant will study the current state of ICT's capabilities and recommend strategies and plans for improving the Bureau’s core systems and data centres.

"We will not only make tax collection more efficient, but we will also significantly expand the tax base,” Guillermo said.

She added that this will help the department to increase the percentage of tax collections from voluntary payments versus tax collections paid after audits, which now stand at 97 percent and 3 percent, respectively.

“And, just as importantly, it will help us reduce the avenues for corruption and tax evasion," she said.

The BIR ICT modernisation plan is part of the Department of Finance’s (DOF) Technology Harmonisation and Modernisation Program that intends to create common technology foundations and information exchange standards among the agencies under the department’s supervision.

The bureau's enterprise architecture design, computing infrastructure strategy, Information Systems Group (ISG) organisational design and change management, RFP technical definition and implementation plan, will all be part of the digitisation drive, Guillermo said.

Through transformation, the BIR is all set to reduce the complexity of IT systems in line with the demands of tax administration.

A BIR report states that an Enterprise Architecture Roadmap will be created based on the findings of the study and will outline numerous activities to migrate from its current state to the desired future state.

Cloud first strategy

For the computing infrastructure strategy, the partners have planned to implement best practices and establish operational governance policies and processes with a cloud-first mindset to attain operational efficiencies, cost optimization and service excellence.

BIR said it will examine the impact on duties and new roles in the context of the cloud infrastructure plan and other high-level technological requirements like data centre renovation and the use of a software-defined network platform.

"By aligning the BIR’s ICT capability with its strategic digital transformation goals, the bureau’s organisational capacity to manage an increasingly complex technical environment will be enhanced, thereby improving performance, increasing security, reducing costs and rationalising the many platforms and services employed by the agency”, said an Avasant consultant.

The BIR has recently launched a web-based electronic invoicing/receipting system (EIS) and electronic sales reporting system to ease taxpayers’ compliance on invoices and receipts, and strengthen further the tax audit capabilities of revenue offices.

Following such crucial implementations, the BIR said it is aiming to become a customer-focused and data-centric agency with a broadened tax base and significantly improved tax collection efficiency.

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