Massive online tax filing signals greater financial inclusion

Published June 5, 2021, 12:29 AM

by Manila Bulletin

The Bureau of Internal Revenue (BIR) has reported that 1.43 million or 99.5 percent of all the income tax returns filed (ITRs) during the last tax filing season were filed online.  In a report to the Secretary of Finance, the BIR said that only 7,139 returns were filed manually.

This is clearly a giant leap forward in the government’s efforts to ramp up digitalization in revenue collection.  Despite the imposition of highly restrictive quarantine measures barely a month before the deadline for tax filing last year, 1.31 million or 90 percent were filed online.  This was a 10 percent increase over the 2018 figure of 1.28 million e-ITRs or 80.4 percent of total returns filed.

Electronic filing of income tax returns is more convenient for the public, thereby making tax compliance easier.  In the manual filing scenario, taxpayers had to endure long queues and many hours of waiting before their returns could be received.  The pandemic has brought on a more auspicious alternative as mass gatherings have been prohibited and physical distancing has been imposed.

In a parallel move, the BIR has also initiated a fast-track, online business registration schedule through its NewBizReg portal.  Instead of physically transacting with a revenue district office, the new business registrant — whether an individual or a business, professionals or mixed income earners; single proprietors, partnerships or corporations — could simply download and answer a questionnaire to establish whether the applicant is a percentage tax or value-added taxpayer.  The accomplished questionnaire is then filed online together with the application. It shall be processed within three working days. Payment of a P500 registration fee and P35 for documentary stamp will also be done through the BIR’s electronic payment channels.

The Bureau of Customs, for its part, proudly declares in its website that “even before the first COVID-19 case in the Philippines (was) recorded, (it) already lined up new systems to fully implement a ‘no contact policy’ which promotes a corruption-free regime (while) minimizing face to face transactions.”

Vital technology-driven systems were implemented or upgraded, including, among others:  (1) Goods Declaration Verification System; (2) Enhanced Value Reference National Value Verification System (e-VRIS), a database of information on the value and classification of imports for reference purposes in support of the implementation of the World Trade Organization’s (WTO) Valuation System; (3) Document Tracking System; (4) Balikbayan Box and Parcel Tracking System and (5) Cargo Targeting System to track “high-risk” shipments.

These initiatives have cushioned the harsh impact of pandemic-driven recession. Total revenues collected by the BIR in 2020 at P1.956 trillion were 10.5 percent lower than the P2.186 trillion collected in 2019, due to the closure of 119,596 businesses.

The pace of digital transformation in business and government processes has accelerated greatly.  Technology solutions have overcome mobility restrictions.  The public has become accustomed to doing business online. Yet, much more needs to be done in terms of education and to ensure more comprehensive financial inclusion.