Digitization is the main driver of tax collection in the Philippines – OpenGov Asia


Taxes are central to a government’s ability to function. Being able to collect the necessary taxes allows the administration to be the well-oiled machine that it can serve its people. This is why digitization has played a pivotal role in the ability of the country’s Bureau of Internal Revenue (BIR) to collect and ensure quality service to the Philippine nation even at the height of the pandemic.

As noted, BIR’s timely digital transformation (DX) programs, complemented by its growing workforce of skilled young professionals under the current administration, have enabled the agency to steadily improve its collection performance and broaden the base taxpayers in 2021.

We can attribute our improved performance to our DX programs as well as the growing number of younger workers who are faster and more adept at learning digital skills.

– Caesar Dulay, Commissioner, Office of Internal Revenue

In his report to Finance Secretary Carlos Dominguez III, BIR Commissioner César Dulay said 4.63 million business taxpayers were registered last year despite the pandemic. This represents an increase of 5.14% compared to the 4.41 million companies registered the previous year. The BIR’s collection has steadily increased from PHP 1.58 trillion (USD 29,946,940,800) in 2016 to PHP 1.78 trillion (USD 33,737,692,800) and PHP 1.96 trillion (USD 33,737,692 800 USD) in 2017 and 2018, respectively.

Dominguez congratulated Dulay and the rest of the BIR.

You have done a great job, especially in introducing digital technology, which has really helped to continue the tax collection effort, especially during the pandemic.

– Carlos Dominguez III, Secretary, Ministry of Finance

The virus initially stifled the fundraising body, reaching the highest figures of the pre-pandemic year of 2019, when collections amounted to PHP 2.19 trillion (USD 41,508,734,400), before dropping to PHP 1.96 trillion (USD 41,508,734,400) at the height of the global coronavirus disease 2019 (COVID-19) outbreak in 2020. However, these numbers have risen back to PHP 2.08 trillion. PHP (39,423,820,800 USD) in 2021, mainly due to digital initiatives.

With BIR expanding the use of digital payment channels to settle tax assessments, approximately PHP 1.75 trillion ($33,169,080,000) or 84% of the PHP 2.08 trillion ($39,423,820,800) collected l last year were collected electronically. The number of tax returns filed electronically of 23.78 million accounted for 93% of the 25.66 million returns filed in 2021. New business registrations can now be made via the BIR web portal https://www .bir.gov.ph/newbizreg/ launched June 1, 2021.

The BIR has also set up its online tax clearance application for the purposes of a call for tenders and tax compliance verification certificate; the Online Personal Capital and Retirement Account System; and its eAppointment, which received around 90,000 bookings from May to December last year.

It has also improved its Electronic Deposit and Payment System (eFPS), Electronic Funds Transfer Instruction System (eFTIS), and other electronic payment channels to facilitate online tax payment by taxpayers.

Digital transformation is causing positive change across the country. The CREATE Act was put in place to usher in new investments in digital technologies in the country, as reported on OpenGov Asia. The nation’s chief justice is looking for a tech-enabled court system in the future.


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