Tax Administration in the Digital Age: Challenges and ... · 2017 31,373 PhP 52,020,740.90 $ 1,000,398.86 2018 January 11,482 PhP 13,363,150.14 ... data via GPRS/USSD. 1. 2. 3. VAT

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

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


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%


monthly comparative







Note:









First Month

April 2016 - GCASH


Credit Card

Second Month

May 2016 - GCASH


Credit Card

additional mode



Credit Card47108,040.95225679,007.82272787,048.77

(Master and Visa)

Debit/ATM Card100104,477.93301241,033.67401345,511.60


efilers


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%



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


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)


monthly comparative







Note:









First Month

April 2016 - GCASH


Credit Card

Second Month

May 2016 - GCASH


Credit Card

additional mode



Credit Card47108,040.95225679,007.82272787,048.77

(Master and Visa)

Debit/ATM Card100104,477.93301241,033.67401345,511.60


efilers


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%



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


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


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


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


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


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

Documents

Tax Administration in the Digital Age: Challenges and ... · 2017 31,373 PhP 52,020,740.90 $ 1,000,398.86 2018 January 11,482 PhP 13,363,150.14 ... data via GPRS/USSD. 1. 2. 3. VAT