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Tax Administration in the Digital Age: Challenges and Opportunities
ByAttorney Lanee Cui-David
Deputy Commissioner, Information Systems GroupBureau of Internal Revenue
The Philippines
1
Outline of Presentation
I. Philippines at a glance
II. Overview of the use of information technology(IT) in tax administration, background, recent digital developments
III. Challenges, opportunities and strategy
IV. Conclusion2
3
Philippines at a glanceLocation: South East Asia Archipelago: 7,107 islandsLand mass: 300,000 square kilometersCapital: ManilaPopulation: 106.51 million latest UN estimates
Climate: Tropical Languages: Filipino, EnglishLiteracy: 92.6%Monetary Unit: Philippine Peso
4
5
Philippines at a glance
OVERVIEW
of the use of INFORMATION TECHNOLOGY (IT) in Tax Administration
6
Mission
Collect taxes through just enforcement of tax laws for nation-building and the upliftment of the lives of Filipinos
Vision
An institution of service excellence and integrity
The Bureau of Internal Revenue
7
The Bureau of Internal Revenue
8
COMMISSIONER
DEPUTY COMMISSIONER OPERATIONS GROUP
Customer Support Service
Collection Service
Assessment Service
Regional Offices
DEPUTY COMMISSIONER LEGAL GROUP
Legal Service
Internal Affairs Service
Enforcement & Advocacy Service
DEPUTY COMMISSIONERINFORMATION SYSTEMS GROUP
Info Systems Devt & Operations Service
Info Systems Project Management Service
Revenue Data Centers
DEPUTY COMMISSIONERRESOURCE MANAGEMENT GROUP
Human Resource Service
Finance Service
Administrative Service
Planning & Management Service Large Taxpayers Service
Project Management and Implementation Service
BACKGROUND
1994 - Tax Computerization Project was undertaken
1996 - Integrated Tax System (ITS) was implemented
1998 - BIR website was launched
Use of IT in Tax Administration
9
BACKGROUND
2001 - Electronic Filing and Payment System wasdeveloped and introduced
2002 - BIR expanded its eServices and developed to 2008 new systems
2013 eBIR Forms System was developed and used
Use of IT in Tax Administration
10
Recent Digital DevelopmentsImpact of Social Media
Recent eFiling DevelopmentRecent ePayment Campaign and Channels
11
Recent Digital Developments -Social Media Campaigns
12
STATISTICS OF ELECTRONICALLY FILED TAX RETURNSPER SYSTEM (eFPS & eBIRFORMS)
2002 29,097 NA 29,0972012 1,270,452 NA 1,270,4522013 1,505,311 NA 1,505,3112014 1,952,293 2,510 1,954,8032015 3,287,087 6,563,925 9,851,0122016 4,304,254 13,243,832 17,548,0862017 4,847,263 15,032,711 19,879,974
eFPS eBIRForms TOTALYEAR
Recent Digital Developments
monthly comparative
MONTHLY COMPARATIVE OF ADDITIONAL MODE OF PAYMENT
Additional Mode of Payment1st Month2nd Month
TransactionsAmountTransactionsAmount
a.Mobile Payment(Gcash)338778,552.56287170,973.15
b.Debit/ATM Cards(Landbank / BancNet)100104,477.93296219,118.13
c.Credit Cards(DBP)47108,040.9563225,426.44
Note:
aGCash covered period
1st Month (April, 2016) - filing season
2nd Month (May 2016)
b & cDebit / Credit Cards covered period
1st Month (October 2017)
2nd month (November 15, 2017)
Mobile Payment(Gcash)Debit/ATM Cards(Landbank / BancNet)Credit Cards(DBP)
TransactionsAmountTransactionsAmountTransactionsAmount
First Month
April 2016 - GCASH
Oct 12-30, 2017 - Debit/ATM Card
Credit Card
Second Month
May 2016 - GCASH
Nov 1-15, 2017 - Debit/ATM Card
Credit Card
additional mode
Additional Mode of PaymentOct. 1-12, 2017Nov. 1-22, 2017TOTAL
No. of TransactionsAmountNo. of TransactionsAmountNo. of TransactionsAmount
Credit Card47108,040.95225679,007.82272787,048.77
(Master and Visa)
Debit/ATM Card100104,477.93301241,033.67401345,511.60
(BancNet/LandBank ATM)
efilers
YearManual FilersElectronic FilersTotal Filers% of Manual Filers to Total Filers% of Electronic Filers to Total Filers
20152,039,115696,8592,735,97475%25%
20161,923,6261,051,2772,974,90365%35%
2017 (Jan-Oct.)1,621,1721,162,3632,783,53558%42%
Source : ITS (Manual Filers). Based on Filing DateRun Date: Nov. 22, 2017
Based on Filing Date
efiled
YEAReFPSeBIRFormsTOTAL
200229,097NA29,097
20121,270,452NA1,270,452
20131,505,311NA1,505,311
20141,952,2932,5101,954,803
20153,287,0876,563,9259,851,012
20164,304,25413,243,83217,548,086
20174,847,26315,032,71119,879,974
Note:Source : ITS (Manual Filers). Based on Filing DateRun Date: Jan. 9, 2018 (Manual Filed Returns for Jan. to Dec. 2017)
PERCENTAGE OF eFILINGOVER TOTAL FILING
YEARNO. OF eFILED
RETURNS (eFPS & eBIRFORMS)
TOTAL FILED RETURNS
% OF eFILED OVER TOTAL FILED
RETURNS
2015 9,851,012 23,020,857 43%
2016 17,548,086 28,862,395 61%
2017 19,879,974 28,764,869 69%
Recent Digital Developments
monthly comparative
MONTHLY COMPARATIVE OF ADDITIONAL MODE OF PAYMENT
Additional Mode of Payment1st Month2nd Month
TransactionsAmountTransactionsAmount
a.Mobile Payment(Gcash)338778,552.56287170,973.15
b.Debit/ATM Cards(Landbank / BancNet)100104,477.93296219,118.13
c.Credit Cards(DBP)47108,040.9563225,426.44
Note:
aGCash covered period
1st Month (April, 2016) - filing season
2nd Month (May 2016)
b & cDebit / Credit Cards covered period
1st Month (October 2017)
2nd month (November 15, 2017)
Mobile Payment(Gcash)Debit/ATM Cards(Landbank / BancNet)Credit Cards(DBP)
TransactionsAmountTransactionsAmountTransactionsAmount
First Month
April 2016 - GCASH
Oct 12-30, 2017 - Debit/ATM Card
Credit Card
Second Month
May 2016 - GCASH
Nov 1-15, 2017 - Debit/ATM Card
Credit Card
additional mode
Additional Mode of PaymentOct. 1-12, 2017Nov. 1-22, 2017TOTAL
No. of TransactionsAmountNo. of TransactionsAmountNo. of TransactionsAmount
Credit Card47108,040.95225679,007.82272787,048.77
(Master and Visa)
Debit/ATM Card100104,477.93301241,033.67401345,511.60
(BancNet/LandBank ATM)
efilers
YearManual FilersElectronic FilersTotal Filers% of Manual Filers to Total Filers% of Electronic Filers to Total Filers
20152,039,115696,8592,735,97475%25%
20161,923,6261,051,2772,974,90365%35%
2017 (Jan-Oct.)1,621,1721,162,3632,783,53558%42%
Source : ITS (Manual Filers). Based on Filing DateRun Date: Nov. 22, 2017
Based on Filing Date
efiled
YEARNO. OF eFILED RETURNS (eFPS & eBIRFORMS)TOTAL FILED RETURNS% OF eFILED OVER TOTAL FILED RETURNS
20159,851,01223,020,85743%
201617,548,08628,862,39561%
201719,879,97428,764,86969%
No of Transactions increase of 2344% in 2016 compared to 2015 and 779% increase in 2017 compared to 2016
Amount of collection increased by 2444% in 2016 compared to 2015 and 862% increase in 2017 compared to 2016
Recent Digital Developments
Month/Year No. of Transactions Amount
2016 3,568 PhP 5,406,067.29$ 103,962.83
2017 31,373 PhP 52,020,740.90$ 1,000,398.86
2018January 11,482 PhP 13,363,150.14
$ 256,983.66
146 3,568 31,373050,000
2015 2016 2017
Number of Transactions
212,495 5,406,067.2952,020,740.90
0
100,000,000
2015 2016 2017
Amount of Collection
Note: Converted to US Dollar (PhP 52.00 to $1)
Sheet1 (2)
Project Roadmap
as of Nov. 28, 2017
No.Project Name201820192020
Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4
1Additional Mode of Payment / ePayment ChannelsUser Acceptance Test (UAT) - China Bank (payment thru SM Bills Payment )- Union Bank(Payment thru iTax Pay) - LandBank of the Phils.(PayMaya)Roll-out preparation and ImplementationExpansion of Additional Mode of Payment with other Banks
1.1Payment Facility for Over-the-Counter TransactionsC/A1; DEVC/A1; UAT;ROL
2eFPS A1; ASM of the Batch Programs; H6 - by DICT
3eBIRForms (Package Software, Application & Hardware)C7; A1; ASM of the SFTP and Batch Programs; H3/6 - by BIR
3.1Subscsription of File Transfer Protocol for eBIRForms SystemSMVPC5
3.2Technical Infrastructure for Sustainability of eBIRForms System, ePayment and TRIUProcurement -LeaseH3/6 - by BIR
Procurement -LeaseH3/6 - by BIR
4eFiling SystemProcurement -ConsultingA2; DEV, UATROL; WAR
4.1Cloud Subscription and Technical Infrastructure for the eFiling SystemProcurement -Lease and SubscriptionC5; H3/6 - BIR
Procurement -Lease and SubscriptionC5; H3/6 - BIR
5TRIUA7; DEV, UAT (Ph 1 & 2)A7; DEV, UAT (Ph 3); ROL (PH 1)ROL (Ph 2 & 3)
5.1Application Support and Maintenance of TRIU SystemProcurement -ConsultingASM
6Enhancement of eCARA2; DEV, UATROL; WAR
6.1Technical Infrastructure for eCARProcurement -Lease and SubscriptionH3/6 - BIR
6.2Procurement -Lease and SubscriptionH3/6 - by Bir
6.3Application Support and Maintenance of the Enhanced eCARProcurement -Lease and SubscriptionA2
7Accounts Receivable Management System (ARMS)A1; H3/6 by BIRA1; H3/6 by BIRA1; H3/6 by BIR
7.1Technical InfraProcurement - LeaseH3/6 - by BIR
7.1.1Procurement - LeaseH3/6 - by BIR
7.2Enhancement of ARMSProcurement -ConsultingA2; DEV, UATROL;
8Online Tax ClearanceProcurement -ConsultingA2; DEV, UAT; ROLWAR
8.1Lease of Servers and SATL for Online Tax Clearance ProcessingProcurement -ConsultingH3/6 - by BIR
9Application Support and Maintenance of eFPS and eBIRForms SystemsProcurement - Consulting
Sheet1
Project Roadmap
as of Nov. 28, 2017
No.Project Name201820192020
Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4
1Additional Mode of Payment / ePayment ChannelsC/A1; ASM of the SFTP and Batch Programs; H3 - C/A1; ASM of the SFTP and Batch Programs;
1.1Payment Facility for Over-the-Counter TransactionsC/A1; DEVC/A1; UAT;ROL
2eFPS A1; ASM of the Batch Programs; H6 - by DICT
3eBIRForms (Package Software, Application & Hardware)C7; A1; ASM of the SFTP and Batch Programs; H3/6 - by BIR
3.1Subscsription of File Transfer Protocol for eBIRForms SystemSMVPC5
3.2Technical Infrastructure for Sustainability of eBIRForms System, ePayment and TRIUProcurement -LeaseH3/6 - by BIR
Procurement -LeaseH3/6 - by BIR
4eFiling SystemProcurement -ConsultingA2; DEV, UATROL; WAR
4.1Cloud Subscription and Technical Infrastructure for the eFiling SystemProcurement -Lease and SubscriptionC5; H3/6 - BIR
Procurement -Lease and SubscriptionC5; H3/6 - BIR
5TRIUA7; DEV, UAT (Ph 1 & 2)A7; DEV, UAT (Ph 3); ROL (PH 1)ROL (Ph 2 & 3)
5.1Application Support and Maintenance of TRIU SystemProcurement -ConsultingASM
6Enhancement of eCARA2; DEV, UATROL; WAR
6.1Technical Infrastructure for eCARProcurement -Lease and SubscriptionH3/6 - BIR
6.2Procurement -Lease and SubscriptionH3/6 - by Bir
6.3Application Support and Maintenance of the Enhanced eCARProcurement -Lease and SubscriptionA2
7Accounts Receivable Management System (ARMS)A1; H3/6 by BIRA1; H3/6 by BIRA1; H3/6 by BIR
7.1Technical InfraProcurement - LeaseH3/6 - by BIR
7.1.1Procurement - LeaseH3/6 - by BIR
7.2Enhancement of ARMSProcurement -ConsultingA2; DEV, UATROL;
8Online Tax ClearanceProcurement -ConsultingA2; DEV, UAT; ROLWAR
8.1Lease of Servers and SATL for Online Tax Clearance ProcessingProcurement -ConsultingH3/6 - by BIR
9Application Support and Maintenance of eFPS and eBIRForms SystemsProcurement - Consulting
Sheet2
Mode
1In house
2Outsource/FM
3Procure
4Lease by BIR
5Subscription (Support)
6Hosted by BIR/DICT
7Donation
8
Infra
CCloud
A Application
HHardware
SPKI
Category
DEVDevelopment
UATUser Acceptance & Testing
ROLTraining & Implementation
ASMSupport & Maintenance
WARUnder Warranty
Sheet4
Month/YearNo. of TransactionsAmount
20163,568PhP5,406,067.29
$103,962.83
201731,373PhP52,020,740.90
$1,000,398.86
2018
January11,482PhP13,363,150.14
$256,983.66
Note:
Converted to US Dollar (PhP 52.00 to $1)
146 1,954 6,45313,285
0
10,000
20,000
Oct-17 Nov-17 Dec-17 Jan-18
Number of Transactions
212,495 3,170,069 5,872,42913,109,245.29
0
20,000,000
Oct-17 Nov-17 Dec-17 Jan-18
Amount of Collection
CREDIT/DEBIT/ATM CARD ONLINE TAX PAYMENTRecent Digital Developments
Total Transactions Amount
2017 6,453 PhP 9,254,993.10
$ 177,980.642018
January 13,285 PhP 13,109,245.29
$ 252,100.87
Month/Year
Credit/Debit/ATM Card
Note: Converted to US Dollar (PhP 52.00 to $1)
Sheet1
Month/YearCredit Card(Master and Visa)Debit/ATM Card(BancNet/LandBank ATM)Credit/Debit/ATM Card
Total TransactionsAmountTotal TransactionsAmountTotal TransactionsAmount
2017281829,745.506,1728,425,247.606,453PhP9,254,993.10
$177,980.64
2018
January255404,798.1413,03012,704,447.1513,285PhP13,109,245.29
$252,100.87
Note:
Converted to US Dollar (PhP 52.00 to $1)
17
PERCENTAGE OF ePAYMENT OVER TOTAL PAYMENT TRANSACTIONS
YEAR
NO. OF ePAYMENT
TRANSACTIONS (in million)
TOTAL PAYMENT TRANSACTIONS
(in million)
% OF ePAYMENT OVER TOTAL
PAYMENT TRANSACTIONS
2015 2.098 13.797 15%
2016 2.818 15.558 18%
2017 3.569 16.729 21%
Note:Run Date: Jan. 4, 2018 (Years 2015 and 2016)
Feb. 22, 2018 (Year 2017)
Recent Digital Developments
monthly comparative
MONTHLY COMPARATIVE OF ADDITIONAL MODE OF PAYMENT
Additional Mode of Payment1st Month2nd Month
TransactionsAmountTransactionsAmount
a.Mobile Payment(Gcash)338778,552.56287170,973.15
b.Debit/ATM Cards(Landbank / BancNet)100104,477.93296219,118.13
c.Credit Cards(DBP)47108,040.9563225,426.44
Note:
aGCash covered period
1st Month (April, 2016) - filing season
2nd Month (May 2016)
b & cDebit / Credit Cards covered period
1st Month (October 2017)
2nd month (November 15, 2017)
Mobile Payment(Gcash)Debit/ATM Cards(Landbank / BancNet)Credit Cards(DBP)
TransactionsAmountTransactionsAmountTransactionsAmount
First Month
April 2016 - GCASH
Oct 12-30, 2017 - Debit/ATM Card
Credit Card
Second Month
May 2016 - GCASH
Nov 1-15, 2017 - Debit/ATM Card
Credit Card
additional mode
Additional Mode of PaymentOct. 1-12, 2017Nov. 1-22, 2017TOTAL
No. of TransactionsAmountNo. of TransactionsAmountNo. of TransactionsAmount
Credit Card47108,040.95225679,007.82272787,048.77
(Master and Visa)
Debit/ATM Card100104,477.93301241,033.67401345,511.60
(BancNet/LandBank ATM)
efilers
YearManual FilersElectronic FilersTotal Filers% of Manual Filers to Total Filers% of Electronic Filers to Total Filers
20152,039,115696,8592,735,97475%25%
20161,923,6261,051,2772,974,90365%35%
2017 (Jan-Oct.)1,621,1721,162,3632,783,53558%42%
Source : ITS (Manual Filers). Based on Filing DateRun Date: Nov. 22, 2017
Based on Filing Date
efiled
YEARNO. OF ePAYMENT TRANSACTIONS (in million)TOTAL PAYMENT TRANSACTIONS (in million)% OF ePAYMENT OVER TOTAL PAYMENT TRANSACTIONS
20152.09813.79715%
20162.81815.55818%
20173.56916.72921%
Electronic Tax Information System (eTIS) Optimization and Enhancements
18
a web-based workflow-driven system developed to replace the 22-year old Integrated Tax System (ITS)
Performance and other implementation issues will be resolved
Incorporate enhancements that when implemented will allow shutdown of eTIS
Integrate with eServices
Use of IT in Tax Administration
Tax Reform for Acceleration and Inclusion (TRAIN)
The goal of the first package of the Comprehensive Tax Reform Program (CTRP) or TRAIN is to create a simpler,
fair, and more efficient system
Lower Personal Income Tax
Simplify Value Added Tax
SimplifyEstate and Donors Tax
IncreaseExcise Tax of Petroleum
Products
Increase Excise Tax of Automobiles
Introduce an Excise Tax for Sugar
Sweetened Beverages
19
Use of IT in Tax Administration
in every CHALLENGElives a greater
OPPORTUNITY-Jeffrey Benjamin
20
Challenges and Opportunities
CHALLENGES AND ISSUES
21
Internet Speed and Cost Procurement People Upgrading And Integration of Systems Policy eBusiness Security Enterprise Risk, and Others
Impact of eTIS Optimization
4/1/2018 22
Challenges OpportunitiesProject team need to be reorganized
Chance to involve more people in the organization
Optimization requires re-architecting the code
allow incorporation of TRAIN impact to the new Core Tax Admin System
Chance to conform with e-government Cloud-first policyChance to incorporate new data privacy and other security requirementsChance to conform with new DOF data dictionary and other standards
Challenges and Opportunities
Impact of TRAIN
4/1/2018 23
Challenges OpportunitiesLowering PIT, simplification of VAT and Estate/Donors Tax, New Excise Tax and increase in existing ones affect processes, forms, codes tables used by eServices and Core Tax Admin Systems.
Incentivise taxpayers with simpler forms and procedure and quicker cash refundsChance to build a transparent, easier to use, secured, integrated systems using updated technologyeTIS Optimization will allow incorporation of TRAIN impact to the new Core Tax Admin System
eInvoicing, eReceipting, eReporting Massive and Costly Info & Communications Technology requirement
Reduce TP dependence on paper receipt; Enhance capture of digitized detailed data; Enhance agency data insights & intelligenceIncreased effectiveness in tax administration
Challenges and Opportunities
TRAIN: eInvoicing/e-Receipting and eSales Reporting
24
The Difference Transaction is recorded in their Receipting Device, standard price
generated by the system and receipt is printed Paper used to print receipts has a government seal on it Possible incentive fiscal rewarding system
Support /Call Center
Data Center
AnalyticalPlatform
Customer Service
MaintenanceCenters
Real-Time dashboards
for high Government
Officials
Recording and transmitting sales
data via GPRS/USSD
1
2
3
VAT receipts
Generate: reports for
VAT refund third-party
matching in case of tax audits/ assessments
Challenges and Opportunities
4/1/2018 25
26
Conclusion
27
Never before in history has innovation offered promise of so much to so
many in so short a time.- Bill Gates
28
Tax Administration in the Digital Age: Challenges and OpportunitiesOutline of PresentationSlide Number 3Philippines at a glanceSlide Number 5Slide Number 6The Bureau of Internal RevenueThe Bureau of Internal Revenue Use of IT in Tax Administration Use of IT in Tax AdministrationRecent Digital DevelopmentsRecent Digital Developments - Social Media Campaigns Recent Digital Developments Recent Digital Developments Recent Digital Developments Recent Digital Developments Recent Digital DevelopmentsElectronic Tax Information System (eTIS) Optimization and EnhancementsSlide Number 19Slide Number 20Challenges and OpportunitiesCHALLENGES AND ISSUESImpact of eTIS Optimization Impact of TRAINTRAIN: eInvoicing/e-Receipting and eSales ReportingSlide Number 25ConclusionSlide Number 27Slide Number 28
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