Russia to help BIR on digitalization

Published March 5, 2021, 6:30 AM

by Chino S. Leyco

The Department of Finance (DOF) has instructed the Bureau of Internal Revenue (BIR) to pursue discussions with Russian tax officials on further improving the Philippines’ tax administration system through digitalization.

In a statement, Finance Secretary Carlos G. Dominguez III said on Thursday, March 4, that the BIR is set to hold a second round of talks with top officials of the Federal Tax Service (FTS) of Russia.

According to Internal Revenue Deputy Commissioner Arnel Guballa, FTS “will gladly support us and help us on our automation or digitalization programs.”

Following Guballa’s report, Finance Undersecretary Antonette Tionko suggested that this possible support for the BIR’s digitalization program be included in the list of topics to be discussed during an upcoming bilateral meeting between the Philippines and Russia this month. 

Officials of the BIR and the FTS met last Jan. 13 via Zoom where they discussed the latter’s best practices that could be applied in the Philippines to further improve its tax administration and compliance. 

BIR officials also raised with FTS Deputy Commissioner Dmitry Volvach the possibility of a bilateral cooperation agreement between the revenue agencies of the two countries. 

Dominguez requested last year then-outgoing Russian Ambassador Igor Khovaev for assistance in helping the BIR set up a tax data capture program for its value-added tax (VAT) collection effort that is similar to Russia’s highly efficient system.

At that time, Khovaev said that Russia has shared its VAT collection technology with other countries and would assist the BIR in its effort to improve its system.

In a report to Dominguez earlier, Guballa commended Russia’s tax administration system, which, he said, uses artificial intelligence and data analytics to capture taxpayers’ information. 

He added that they learned from the FTS that it now audits only one 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 Jan. 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, said Guballa.

Guballa said the IRIS launching forms part of the deliverables this year under the  BIR’s long-term Digital Transformation Program.