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Philippines, US ink P39-M grant for BIR modernization program

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THE PHILIPPINE government signed on Tuesday a $809,450 or P39-million grant from the United States that will support the modernization program of the Bureau of Internal Revenue (BIR).

The US Trade and Development Agency (USTDA) grant will fund the BIR’s Information Communication Technology Modernization Strategy and Data Center project.

The project aims to conduct a technical assessment of the BIR’s existing information and communications technology and develop an enterprise architecture plan for the agency. It will also review the bureau’s current Information System Group (ISG) and explore possible restructuring and training programs.

Department of Finance (DoF) Secretary Carlos G. Dominguez III and John C. Law, Charge d’Affaires of the US Embassy in the country, formalized the agreement in a signing ceremony on Tuesday.

“The USTDA grant will lead to further efficiencies, improved performance, increased security, reduced costs, and greater transparency — all of which are not only vital to the BIR’s tax administration duties, but are  extraordinarily important in further strengthening the confidence of the public in its government institutions,” Mr. Law said.

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The BIR in August set up a 10-year digitalization roadmap under which it targets to establish a dedicated platform for taxing online transactions by 2026 and set up a “data-driven collection, audit and enforcement” system by 2027-2030.

Mr. Dominguez said the agency’s previous initiatives to digitize its processes helped boost the country’s tax effort, with total tax collections relative to gross domestic product (GDP) increasing to 14.5% in 2019 from 13% in 2015.

Last year, the BIR said 86% or P1.67 trillion out of its total collections were paid online worth as the ongoing coronavirus pandemic encouraged taxpayers to transact digitally to avoid exposing themselves to the disease.

Tax returns filed electronically last year accounted for nearly 100% of the total, Mr. Dominguez added.

“These figures are projected to dramatically increase in the coming years as the BIR accelerates its digital transformation,” the Finance chief said.

“A highly efficient revenue collection system, therefore, is critical to help us recover strongly from this pandemic and build back the best possible future for our people. Our aim is not merely to have a state-of-the-art system in our data management. We seek to be at the cutting edge in the application of new technologies to achieve the best revenue performance,” he added.

The BIR collected P1.94 trillion in taxes in 2020, down 11% year on year but 15% higher than the revised P1.69-trillion target. — B.M. Laforga

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