Duterte authorizes DOF to firm up US grant for BIR digital transformation

Robie de Guzman   •   January 20, 2021   •   504

MANILA, Philippines – President Rodrigo Duterte has authorized the Department of Finance (DOF) to enter into talks with the United States Trade and Development Agency (USTDA) for a possible $809,450 or about P39-million grant to assist the Bureau of Internal Revenue (BIR) in its digital transformation program.

In a statement issued on Wednesday, the DOF said the president has approved its request for a Special Authority designating and authorizing its senior officials “to negotiate and/or facilitate, in accordance with law, for and on behalf of the Government of the Republic of the Philippines (GPH), with the authorized representatives of the USTDA.”

The Special Authority covers the negotiations for an agreement on the grant of $809,450.00 (approximately P38,850,873.20) by the USTDA for the BIR’s Information and Communications Technology (ICT) Modernization Strategy and Data Center Technical Assistance Project.

The DOF said that Duterte also designated and authorized Finance Secretary Carlos Dominguez III or BIR Commissioner Caesar Dulay “to conclude, sign, execute and deliver the said Grant Agreement.”

The BIR project aims to modernize the bureau’s infrastructure and operational environment, it added.

“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 organizational framework of the BIR’s Information System Group (ISG) including recommended restructuring and training programs,” the DOF said.

Dominguez has cited the BIR’s digital transformation efforts as among the factors that led to a dramatic improvement of its services to taxpayers and its robust collection performance ahead of the COVID-19 pandemic-induced crisis.

He said the digitally enhanced administrative reforms being undertaken by the BIR are now beginning 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.

The digital switch has also led to the more convenient and efficient electronic filing of tax payments, especially during this coronavirus pandemic, he added.

Starting February 14 last year, the BIR allowed the use of the PayMaya mobile application as an additional electronic payment channel for tax payments.

On top of PayMaya, these other e-payment tools are GCash, LandBank Linkbiz, DBP PayTax, Union Bank Online and PESONet.

The BIR has also improved the tax forms deployed in the e-BIR Forms System to make the filing of tax returns more accessible and convenient to taxpayers.

It began the pilot implementation in April 21 last year of its web-based Internal Revenue Integrated System (IRIS) that will be the central tool and repository to process taxpayers’ information, the DOF said.

The IRIS is targeted to be available nationwide by the end of 2021.

The Finance department added that an Electronic Audited Financial System (eAFS) was also launched last June 1 to allow business taxpayers to electronically submit their financial statements to the BIR.

The BIR also launched on October 19 its eAppointment Facility which aims to enable taxpayers to continue consulting revenue officials on their tax-related concerns even with the mobility restrictions imposed to curb the spread of COVID-19.

In November 2020, the BIR also opened its web-based Procurement, Payment, Inventory and Monitoring System (PPIMS) and its Online Application for Tax Clearance for Bidding Purposes (eTCBP), according to the DOF.

DOF OKs inclusion of COVID-19 vaccine imports in express lane for tax processing

Robie de Guzman   •   February 26, 2021

MANILA, Philippines – All importations of COVID-19 vaccines will now be included in the “Mabuhay” or express lane of the Department of Finance to allow quick processing of the tax and duty exemptions of these shipments, the department said.

In a statement issued on Thursday, the DOF said Finance Secretary Carlos Dominguez III approved the inclusion of vaccine imports to allow for the expedited processing of the tax and exemptions for vaccine applications.

Under Department Order 29-94, the Mabuhay Lane is tasked to expeditiously process applications for the tax and duty exemption of certain groups of importers, which include export-oriented firms, returning residents (balikbayans) and non-profit, non-stock educational institutions.

COVID-19 vaccine tax exemption applications in the Mabuhay Lane, which is under the DOF’s Revenue Office, will be processed within 24 working hours, the department said.

These tax exemption policies will be incorporated in the inter-agency guidelines on the implementation of a one-stop shop for international donations and government-procured COVID-19 vaccines, the department added.

Dominguez also approved the waiving of filing fees for COVID-19 vaccine applications under the Mabuhay Lane and the use of the Tax Exemption System Online Filing Module in processing the vaccine imports “to further support the government’s rollout of the COVID-19 vaccination program.”

“We add that the Mabuhay Lane currently processes all Relief Consignment under Section 120 in relation to 121 of the Customs Modernization and Tariff Act (CMTA). The Lane is expected to process all COVID-19 vaccines which may qualify as relief consignment,” Finance Undersecretary Antonette Tionko said.

Relief Consignment refers to goods donated to national government agencies and accredited private entities for free distribution to, or for the use of, victims of calamities.

Under Section 121 of the CMTA, relief consignment imported during a state of calamity and intended for the use of calamity victims shall be exempted from the payment of duties and taxes.

DOF orders BOC to heighten security vs pork smuggling

Aileen Cerrudo   •   February 23, 2021

MANILA, Philippines—The Department of Finance (DOF) has ordered the Bureau of Customs (BOC) to heighten its security against pork smuggling .

Finance Secretary Carlos Dominguez III wants a tighter watch over the possible misdeclaration or misclassification of pork shipments entering the country.

The order was issued after President Duterte approved in principle the recommendation of the Department of Agriculture (DA) to expand the minimum access volume (MAV) allocation for pork imports.

Dominguez said some importers may misdeclare their pork shipments to avoid paying higher import duties. The current tariff on pork within the MAV is at 30 percent, while off-quota imports are taxed a higher 40 percent. 

“Edible offal (entrails) of bovine animals, such as swine, sheep and goats are taxed much lower, which some importers may declare [for their] prime pork shipments to avoid paying higher import duties,” the DOF said in a statement.

Meanwhile, Customs Commissioner Rey Leonardo Guerrero assured that the bureau has been closely monitoring the imports of meat products, including pork and chicken. AAC

Philippines eyes deal with Russia on tax data capture

Robie de Guzman   •   February 4, 2021

MANILA, Philippines – The Philippines and Russia are exploring possible cooperation that could further improve the country’s tax administration and compliance, the Department of Finance (DOF) said.

In a statement issued on Wednesday, the DOF said officials from the country’s Bureau of Internal Revenue (BIR) and Russia’s Federal Tax Service (FTS) met to discuss the latter’s best practices that could be applied in the Philippines’ revenue agencies.

During an online meeting with FTS deputy commissioner Dmitry Volvach last January 13, both countries explored a possible bilateral agreement between the revenue agencies of the two nations.

In a report to Finance Secretary Carlos Dominguez during a recent executive committee (Execom) meeting, BIR Deputy Commissioner Arnel Guballa commended Russia’s tax administration system, which, he said, uses artificial intelligence and data analytics to capture taxpayers’ information.

“We had an initial meeting with the Federal Tax Service of Russia, represented by their Deputy Commissioner Dmitry Volvach. They have good tax administration. They started their digitalization in 2016 and, after 5 years, they are now into capturing almost all the data of taxpayers,” said Guballa in his report.

Guballa said they learned from the FTS that it now audits only 1 out of 7,000 taxpayers as a result of Russia’s well-placed and efficient system that encourages people to comply with tax laws.

Last January 15, the BIR launched its Internal Revenue Integrated System (IRIS), which will serve as the agency’s central tool and repository to process taxpayers’ information.

It is expected to be rolled out nationwide in the fourth quarter of 2021, according to Guballa.

The IRIS launching forms part of the deliverables this year under the BIR’s long-term Digital Transformation Program, he added.

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