Embracing information technology in taxation
The BIR has been entrance and heart in a number of headlines the final couple of weeks, however sadly, not for the very best of causes. From the Megaworld process drive fiasco to the missed assortment goal, the BIR is in a dire want of a sustained win.
That win might come within the face of its new incoming commissioner, Lilia Guillermo. A former deputy commissioner and the present Assistant Governor of the Bangko Sentral ng Pilipinas, her background in tax and knowledge know-how might breathe in some new life into the BIR. However what precisely can info know-how do to advance the reason for taxation?
The rising reliance within the processing of digital knowledge and use of digital means to fill the holes in conventional tax audits are commonplace, and even staples, in different taxing jurisdictions. The spectacular use of data know-how had allowed these international taxing jurisdictions to not solely improve income assortment, but additionally enhance taxpayer compliance and cooperation.
In a number of territories, tax authorities utilized digital and risk-based knowledge processing to help taxpayer compliance and verification.
In Chile, the tax authorities present taxpayers an info know-how system whereby the latter might conduct their tax-related compliance transactions (from beginning a enterprise to closing it). A web based portal is likewise given to taxpayers, which provides them a custom-made view of their respective tax obligations, corresponding to tax filings. This enables taxpayers, in addition to tax officers, to immediately monitor and assessment tax compliance. On-line requests have been overwhelmingly optimistic, which exhibits the clear affect that the system has on taxpayer compliance.
To not be outdone, the tax authorities within the Netherlands are taking knowledge processing to new heights by making use of a risk-based method within the evaluation of tax returns and sending “pro-memoria” letters to taxpayers who’ve most probably dedicated potential errors or errors of their tax returns. As a robust optimistic response, roughly 70 % to 75 % of the notified taxpayers voluntarily amended their respective tax returns.
Other than knowledge processing, the BIR can also make distant communication instruments a regular relating to taxpayer interplay. This could require the event of revolutionary IT options.
In Chile, Georgia, Hungary, Peru, and Spain, to call just a few, numerous distant inspection and digital audit platforms had been developed to cut back, if not eradicate, face-to-face conferences. This resulted in an improved and environment friendly high quality of audit by decreasing the time to conduct the audit, use of much less sources to supply wanted documentation, and full digitalization of information and communication, amongst others.
Taking issues additional, India applied the “Faceless Scheme” which spans assessments, appeals, and penalty computations. Below this scheme, a centralized physique facilitates all assessments, appeals, and penalty computations by assigning the identical to regional facilities by way of an automated allocation system. It favored dynamic jurisdiction over the standard mounted jurisdiction by reliance on digital technique of communication. This paved the best way for optimum utilization of sources resulting in elevated effectivity, transparency, and accountability.
The BIR, to its credit score, had adopted digital means in a few of its companies. The eFPS and eBIRForms amenities enabled taxpayers to digitize their tax filings and allowed digital cost of taxes. Digital invoicing additionally enabled instantaneous reporting of transactions. However in comparison with different taxing jurisdictions, extra may be performed. And extra ought to be performed.
For starters, the BIR might make extra of its companies and processes accessible digitally. Tax companies like utility for TIN, updating of registration info, or submission of paperwork, amongst others, could also be performed by a devoted on-line portal for the comfort of taxpayers. Specialised methods designed to enhance effectivity could also be customized made to deal with the digital shift of inside processes of the BIR, like approvals and actions of paperwork and information from one workplace, district, or area to a different.
With the growth of telecommunication amenities within the Philippines, the BIR ought to journey the wave of technological development and embrace the digital march of progress. Will probably be powerful and the funding can be substantial. Dynamic and revolutionary steps would have to be taken. However for the BIR to realize vital and sustained wins, nothing much less is required.
The writer is a junior accomplice of Du-Baladad and Associates Legislation Of-fices (BDB Legislation), a member-firm of WTS International.
The article is for common info solely and isn’t meant, nor ought to be construed as an alternative choice to tax, authorized or monetary recommendation on any particular matter. Applicability of this text to any precise or explicit tax or authorized difficulty ought to be supported subsequently by an expert examine or recommendation. You probably have any feedback or questions regarding the article, you could e-mail the writer at jomel.manaig@bdblaw.com.ph or name 8403-2001 native 380.
