By Froilyn P. Doyaoen-Pagayatan
Business World (11/25/2013 – p.S1/6)
THE PHILIPPINES is included in the top 10 economies with the most improvement in their business regulatory systems, as reported in Doing Business 2014, the 11th edition of the annual joint report of the World Bank and International Finance Corporation. The annual report benchmarks government regulations affecting small and medium private enterprises, based on the following categories: starting a business, dealing with construction permits, getting electricity, registering property, getting credit, protecting investors, paying taxes, trading across borders, enforcing contracts, resolving insolvency and employing workers.
The report showed that the Philippines improved in three categories: dealing with construction permits, getting credit, and paying taxes. In terms of tax payments, the report noted that the improvement was partly due to the country’s expansion of its online filing and payment systems and the introduction of simplified tax forms.
The Electronic Commerce Act of 2000 (Republic Act No. 8792) mandates the creation of online filing and payment systems and requires certain government offices to transact government business electronically. The Bureau of Internal Revenue (BIR) was one of the government organizations that transitioned to electronic transactions, including electronic filing documents and payments through electronic systems.
The BIR Wb site now gives taxpayers access to various online registration, filing, and payment systems for internal revenue taxes. These include: Electronic Registration (eReg), Electronic Accreditation (eAccReg), Electronic Filing and Payment System (eFPS), Electronic BIR Forms (eBIRForms), Electronic Reconciliation of Listings for Enforcement (eRELIEF), Electronic Sales (eSales), Electronic Submission (eSubmission), Electronic Official Record Book (eORB), and Electronic Documentary Stamp Tax (eDST). To maximize the convenience afforded by these systems, taxpayers should have an understanding of each function.
The eReg is the online facility for the issuance of a Taxpayers Identification Number (TIN) for individual taxpayers, payment of annual registration fee, and issuance of Certificate of Registration (COR) for single proprietors, professionals and mixed income earners. The eREG may also be used by registered employers to secure a TIN on behalf of their employees.
The eAccReg allows the online accreditation of suppliers of cash register machines/point of sales (CRM/POS) machines and the online registration of the CRM/POS machines by the supplier and the taxpayer-user.
The eFPS allows taxpayers to directly encode and file tax returns and pay their taxes online. Tax payment is accomplished through the bank debit system using the internet banking facilities of any BIR authorized agent bank (AAB) accredited to accept payment through eFPS. Over the years, the BIR expanded the types of taxpayers required to enroll in the eFPS to cover the following:
• Large taxpayers;
• Excise taxpayers;
• Top 20,000 private corporate taxpayers;
• Top 5,000 individual taxpayers;
• Insurance companies;
• Government agencies/instrumentalities;
• Local government units;
• Contractors and/or suppliers transacting business with government;
• Corporations with paid-up capital stock of P10 million;
• Corporations with complete computerized system;
• Government bidders pursuant to Executive Order 398;
• Enterprises enjoying fiscal incentives granted by government agencies such as those registered with the PEZA, BoI, and Subic Economic Zone.
The eBIRForms may be used by taxpayers who are not required to enroll in the eFPS and their accredited tax agents (ATAs), as an alternative for preparing and filing tax returns easily and with enhanced accuracy. It consists of the offline package, a tax-preparation software that allows taxpayers and their ATAs to prepare tax returns offline, and the online package, a filing infrastructure for online submission of tax returns. However, as of this writing, the online package of the eBIRForms is still unavailable, as indicated in BIR Revenue Memorandum Order (RMO) No. 24-2013.
Under eRELIEF, corporate taxpayers submit through the BIR Web site their quarterly sales and purchases data which the BIR uses to estimate the VAT due to the BIR.
The eSales system allows the online reporting of the gross monthly sales of taxpayers that use CRM/POS machines in their business. Large taxpayers using CRM/POS machines for every sale are required to submit to the BIR a monthly sales report per machine through the BIR eSALES link.
The eSubmission facility enables taxpayers to electronically submit required attachments to tax returns such as Monthly Alphalist of Payees (MAP), Summary Alphalist of Withholding Tax (SAWT), and Summary List of Sales, Purchases and Importations (SLPI).
The eORB system is intended to replace the manual preparation and submission of ORBs by taxpayers dealing with articles subject to excise tax. The ORBs contain daily transactions of receipts and removals of regulated raw materials, goods-in-process and finished products. Pursuant to RR No. 3-2013, the eORB system shall initially cover the major tobacco companies that will be identified by the BIR. Subsequently, the eORB system shall cover other tobacco companies and other taxpayers liable for excise tax.
The eDST system, which is a Web-based application that is capable of affixing secured DST, is used by specific types of companies, such as banks and other financial institutions, shipping and airline companies, and educational institutions.
Even the application, processing, and approval of authority to print (ATP) official receipts and invoices will be fully automated under the online ATP system, which will soon be available, as stated in RR 18-2012 and Revenue Memorandum Order (RMO) 12-2013.
The BIR Web site also contains a facility for airing complaints through the Electronic Complaint (eComplaint) service where taxpayers can file complaints related to non-issuance of official receipts, tax fraud or evasion, erring BIR officials and employees, and BIR transactions or services.
The BIR has other online systems meant to provide relevant information to taxpayers such as the Electronic Broadcasting Service (eBroad), and Electronic Report Card (eReportCard).
The eBroad was launched on Nov. 15, 2012 as a facility for confirming tax payments made to BIR through AABs within 48 hours from transaction date via text, e-mail and BIR website.
Through the eReportCard, the BIR deploys tax performance information to taxpayers, particularly large taxpayers in different industries, in the form of reports and graphs on tax due, gross sales, tax ratio, and tax payments.
To provide taxpayers free access to the BIR’s electronic systems, eLounge facilities with Internet-connected computers have been set up in Metro Manila Revenue District Offices (RDO) and selected RDOs outside Metro Manila.
Given all these, taxpayers now have fast, convenient, cost-effective and interactive systems for tax filing and payment, notwithstanding occasional system downtimes, which have caused taxpayers to revert to manual filing and payment.
For the first time in its history, the BIR collected over P1 trillion in 2012. The BIR attributed this record collection to priority programs for the improvement of operations, including the launch and/or enhancement of BIR online systems. It would seem that the BIR’s direction is towards a comprehensive automation of tax administration systems given that the BIR’s Reform Master Plan, 2013-2016 (RMO 29-2013) includes the rollout of additional online systems, as follows:
• Electronic Certificate Authorizing Registration (eCAR), an online system that will automate the generation of barcoded Certificate Authorizing Registration (CAR) in order to reduce revenue losses arising from spurious CARs;
• Online System for Transfer Tax Transactions (OSTT), which is a facility that will enable taxpayers to file their transfer tax transactions online and has a capability for automated computation of tax due and generation of tax returns;
• Electronic Tax Information Systems (eTIS): an undertaking intended to improve BIR core Tax Administration System by providing a single, Web-based automated solution. It is intended to replace the existing Integrated Tax System (ITS), the core BIR infrastructure that houses several tax application systems.
The BIR’s Reform Master Plan, 2013-2016 also includes online accreditation of importers and brokers and online submission of applications for tax clearance for bidding purposes.
Taxpayers have been calling for reforms in government operations, and the creation of an online tax portal appears a step in the right direction. In the Doing Business 2014 report, it is recognized that electronic systems for filing and payment taxes may benefit tax authorities and taxpayers alike. Shifting to electronic systems may result in a more manageable workload for tax enforcers as well as reduced operational costs, including processing, handling, and storage costs. For taxpayers, electronic filing and payment increases tax compliance and saves time.
It is hoped that stakeholders can maximize using the BIR online systems not just for the sake of tax compliance but for efficient administration of businesses. For it is through active involvement in these online systems that we can identify and communicate the flaws and necessary improvements in such reforms and, in the process, help build on these systemic gains for a better and more efficient government.
Atty. Froilyn P. Doyaoen-Pagayatan is a tax director of SGV & Co.
This article is for general information only and is not a substitute for professional advice where the facts and circumstances warrant. The views and opinion expressed above are those of the author and do not necessarily represent the views of SGV & Co.