Negotiations on for US grant to boost BIR digital systems

21-Jan-2021 Intellasia | PhilStar | 6:02 AM Print This Post

President Rodrigo Duterte has given the greenlight to the Department of Finance to negotiate with the US a fresh grant meant to modernise the government’s main tax collection agency.

The authority from Duterte would pave the way for talks between the finance agency and the United States Trade and Development Agency (USTDA) for an $809,450 (about P39 million) grant to the Bureau of Internal Revenue (BIR). If negotiations succeed, Washington will give the funds to Manila at no interest cost.

The grant will cover part of the financing needs of the BIR’s digitalisation programme called “ICT Modernisation Strategy and Data centre Technical Assistance.”

“The project funded by the USTDA grant will ensure an in-depth technical assessment of the BIR’s current ICT environment, the development of an Enterprise Architecture roadmap/framework, and an assessment of the organisational framework of the BIR’s Information System Group (ISG) including recommended restructuring and training programmes,” DOF said in a statement on Wednesday.

For years, BIR has been beefing up its digital infrastructure to collect more revenues, but last year’s sudden and dramatic shift to online transactions highlighted the need to speed up the digital shift to capture online transactions considered taxable under tax laws.

That effort appeared to have succeeded to an extent. BIR, which typically accounts for 80 percent of state revenues every year, collected P1.79 trillion from January to November, already beating the lowered collection goal of P1.69 trillion for the year. The haul however was down 11.1 percent year-on-year.

According to the finance department, which oversees BIR, the tax bureau’s reforms are now starting to pay off “by way of the significant improvement in the country’s tax effort from 13 percent of gross domestic product (GDP) in 2015 to 14.5 percent of GDP in 2019.”

From January to September, tax effort was steady at 14.5 percent after the pandemic cut tax receipts when businesses were forced to shut down and consumption activity fell.

Already, BIR has started accepting electronic tax payments in February last year through various channels such as PLDT Inc.’s PayMaya, Globe Telecom’s GCash, Linkbiz of the Land Bank of the Philippines, PayTax under the Development Bank of the Philippines, and online facilities of Union Bank of the Philippines.


Category: Philippines

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