Rebirth of Digitalization: A booster for taxpayers and the government
Christmas commemorates the birth of Jesus and is observed every Dec. 25. A few days more, and we will be officially celebrating the holiday most associated with giving. And despite the COVID-19 pandemic, it looks like the long-awaited recovery is taking hold.
Many changes have transpired since COVID-19 upended our lives. The vaccination campaign has really had an impact on the economy’s revival, and the campaign for booster shots might do even more.
As it reforms basic services delivery, revenue collection, and investment generation, the government is also offering boosters that would help taxpayers and businesses get through their digitalization initiatives.
Recently, the Finance Secretary, during the BLGF Stakeholders Recognition Program, called on local government units (LGUs) to adopt digital technologies in tax administration and their business processes to build their revenue generation and mobilization capacity in the new normal. To accomplish these tasks, the Department of Finance (DoF) wants LGUs to adopt electronic platforms for business registration and renewal, as well as for the assessment and collection of local taxes, fees, and other charges. Moreover, local treasurers, for their part, have been urged to start linking up their systems with online payment facilities already offered by government financial institutions (GFIs) which also serve as their depository and servicing banks, to ensure safe, efficient, and convenient ways of transacting with LGUs. In time for the LGU Renewal of Business Registration for the following year, various LGUs like those of Mandaluyong, Manila, Marikina, Muntinlupa, Navotas, Parañaque, Pasig, Quezon City, San Juan, Cebu, and Davao, among others, have implemented online filing and payment systems. However, the migration to online and digitalization for permit processing has had its birth pains. Taxpayers and businesses are required to upload the necessary documents, wait for the application to be evaluated, and re-upload documents, if needed. Although delays are expected in review and processing, this process may still be improved by the LGUs as they develop their familiarity with the system. In the meantime, it would be best for taxpayers and businesses to file applications for LGU renewals in advance in order to save time and as a precaution against delays beyond anyone’s control.
Other digitalization initiatives include the enhancement of the DoF’s Tax Exemption System (TES), which was replaced by the web-based TESlite to make it more convenient for importers to apply for tax and duty exemptions with the department’s revenue office.
The Securities and Exchange Commission (SEC) has also sped up digitalization programs to improve ease of doing business and spur the growth of domestic enterprise that allow companies to register, file their reporting requirements, and pay fees online. Among the latest digital transformation initiatives are the Electronic Simplified Processing of Application for Registration of Company (eSPARC) that was launched in April; the One-day Submission and E-registration of Companies (OneSEC), which is a subsystem of eSPARC in which company information is already pre-loaded; and the Online Submission Tool (OST), used for filing the AFS, GIS, Sworn Statement for Foundation (SSF), General Form for Financial Statements (GFFS), Special Form for Financial Statement (SFFS), and other reporting requirements.
This year, the Bureau of Internal Revenue (BIR) also issued Revenue Memorandum Circular (RMC) 43-2021, which provides the revised guidelines on the use of the eAFS facility in the submission of duly filed Income Tax Returns (ITR) and their attachments, including BIR Form No. 1709. The eAFS was launched with the goal of encouraging every taxpayer to use digital channels in complying with tax responsibilities. Also, with the BIR’s EFPS, the filing of tax returns and payment of tax liabilities by large corporate taxpayers, professionals, and individuals may now be done through BancNet’s multi-bank payment gateway, in which transactions are done through the internet, doing away with the traditional paper-based filing of tax returns and offering convenient payment channels for the various monthly and quarterly taxes. However, there are still some issues in the filing of returns, especially during tax season. The BIR’s platform may still have bugs or delays in accepting the duly filed and paid returns online. These areas can still be improved upon. Again, it is still a good practice for taxpayers to file their taxes in advance.
On Oct. 22, the BIR issued an advisory on an additional ePayment channel apart from AABs, LANDBANK, DBP, UnionBank, PesoNet, Globe GCash, and PayMaya. This is the I-Pay MYEG Philippines, Inc. (IPMP) Online Payment Facility, a certified Taxpayer Software Provider and a taxpayer agent using credit cards and mobile wallets. Just a reminder for taxpayers using these channels: a minimal fee may be imposed for each transaction.
On Dec. 16, the BIR also issued RMC 125-2021, which served notice that tax payments on electronically filed One-Time Transactions (ONETT) may now be paid through LANDBANK’s Liz.Biz Portal, DBP’s Pay Tax Online, and UnionBank’s Online Web and Mobile Payment Facility.
The rebirth of digitalization during the pandemic is really about improving government efficiency. Such initiatives should serve as a booster for taxpayers and businesses seeking to meet their tax and compliance responsibilities. Despite the inevitable birth pains, taxpayers must take advantage of these boosters, but also take care to file the necessary applications and taxes in advance.
Let’s Talk Tax is a weekly newspaper column of P&A Grant Thornton that aims to keep the public informed of various developments in taxation. This article is not intended to be a substitute for competent professional advice.
Ma. Jessica A. Guevarra is a manager from the Tax Advisory & Compliance division of P&A Grant Thornton, the Philippine member firm of Grant Thornton International Ltd.
pagrantthornton@ph.gt.com
