Bureau of Internal Revenue

The Bureau of Internal Revenue (BIR) seeks to collect taxes efficiently and effectively and at the least cost to the government. To achieve this mission, the BIR has decided to do away with traditional paper-based tax filing and payment processing and adopt a more efficient electronic business model as an alternative tool.

Voluminous tax returns

At present, the Bureau receives voluminous tax returns filed by the taxpayers. These returns are then encoded and processed by the Integrated Tax System (ITS). Information generated by the ITS is then used for analysis and decision-making. The Bureau is faced with the problem of encoding backlogs.

To address these challenges, the Bureau has decided to adopt an Electronic Filing and Payment System as the technology to be used in its Automated Data Capture Project.

e-filing and e-payment defined

The BIR's Electronic Filing and Payment System is the electronic processing and transmission of the taxpayers tax return information including attachments, and taxes due to the government, made over the Internet through the BIR web site.

e-Filing uses BIR-supplied validation and computation rules to efficiently check for completeness and correctness of taxpayer inputs. e-Payment is the on-line payment and confirmation process between the system and participating banks.

Taxpayers equipped with a computer and a modem can e-file their tax returns by accessing the BIR web site at www.bir.gov.ph. The taxpayer will be able to access the File Returns option where he will be asked to log on to the system.

Fujitsu Philippines, Inc. (FPI) has been contracted to help BIR design, develop, and implement Electronic Filing and Payment System modules and infrastructure

The pilot rollout and implementation of the Electronic Filing and Payment System project, held June 25th, was targeted for 730 large taxpayers, including 2000 individuals (volunteer BIR employees). The Bureau estimates to process on its pilot rollout 25,000 tax forms using the 13 different types of tax forms, with the system able to scale up to process 20 million taxpayer forms.

Two government banks, the Land Bank of the Philippines and Philippine National Bank, are undergoing testing for e-payment, scheduled for roll out in end of July. There have also been discussions with some commercial banks to accept e-payments.

Challenges Faced

Deputy Commissioner Lilia Guillermo says the BIR is always on the lookout for new ways to provide frontline services that are e-enabled and are convenient for millions of taxpayers.

FPI's cost-effective solution and quality service proved advantageous for the BIR, claims Ms. Guillermo. "We are able to save enough funds to be used for other important endeavors. FPI is indeed a partner that has a proven track record of delivering high-availability system, as well as people who understand the BIR work culture," she claims. "FPI provides all of this, aside from meeting the project's deadlines with a guarantee that the system is reliable and easy to support and manage."

She further adds that the Bureau's main challenge, along with FPI, is to face the birth pains of the system. "We need to make it work first because everybody in the government, as well as the public in general, is waiting for the concrete projects of e-transactions in government. The electronic filing and payment system is one of the first projects in so far as e-governance is concerned. We want to achieve the real objective of making the system more encompassing, which include non-large taxpayers."

The next target for e-transactions at BIR, she says, is e-registration for new businesses and new taxpayers. For his part, Mr. Alberto Pio de Roda, BIR Assistant Commissioner, hopes that the system can handle 5,000 large taxpayers and half a million businessmen all over the country in the coming months.