Let's Talk Tax

Rebirth of Digitalization: A booster for taxpayers and the government

Ma. Jessica A. Guevarra
By:
Ma. Jessica A. Guevarra
Contents

Christmas is a holiday which commemorates the birth of Jesus and is being celebrated by most Catholics every December 25 under the Gregorian calendar. Yes, a few days more, and we will be officially celebrating the season of giving and celebration. Despite the scourge of the COVID-19 pandemic, Filipinos still managed and are continuously managing to recover from the crisis.

There are many changes which transpired from the time the COVID-19 virus hit our country, up to the present. For our government, the campaigns on vaccination have really made a huge impact on the country’s revival. Not long after, campaigns for booster shots began.

Similar to what it is doing to deliver basic services in terms of revenue and investments generation, the government is also creating boosters that would help taxpayers and businesses keep up through digitalization initiatives.

Just recently, the Department of Finance (DOF) Secretary, during the BLGF Stakeholders Recognition Program, called on local government units (LGUs) to adopt digital technologies in tax administration and their business processes to build their revenue generation and mobilization capabilities under the new normal. To accomplish these tasks, the DOF Secretary said that LGUs should adopt electronic facilities for business registration and renewal, as well as for the assessment and collection of local taxes, fees, and other charges.  Moreover, the local treasurers, for their part, should start linking up with online payment facilities already offered by government financial institutions (GFIs), which also serve as their depository and servicing banks to ensure safe, efficient, and convenient ways of transacting with LGUs under the new normal. In time for the LGU Renewal of Business Registration for the following year, various LGUs like those of Mandaluyong, Manila, Marikina, Muntinlupa, Navotas, Paranaque, Pasig, Quezon City, San Juan, Cebu, and Davao, among others, have already implemented the online filing and payment system. However, the migration to online and digitalization for permit processing also has its birth pains. Taxpayers and businesses are required to upload the necessary documents, wait for the application to be evaluated, and re-upload documents, if needed. Although there would possibly be delays in review and processing, this development may still be improved by the concerned LGUs as they go along with this new practice. For the meantime, it would be best for taxpayers and businesses to file the application for LGU renewals in advance in order to save time and to anticipate delays beyond one’s control.

These digitalization initiatives likewise include the enhancement of the DOF’s Tax Exemption System (TES), which was replaced by the web-based TESlite to make it more convenient for importers to apply for tax and duty exemptions with the department’s revenue office.

The Securities and Exchange Commission (SEC) has also sped up digitalization programs to improve ease of doing business and spur the growth of domestic enterprise that allow companies to register, file their reportorial requirements, and pay transaction fees online. Among the latest digital transformation initiatives are the Electronic Simplified Processing of Application for Registration of Company (eSPARC) that was launched last April; the One-day Submission and E-registration of Companies (OneSEC), which is a subsystem of eSPARC where company information are already pre-filled; and the Online Submission Tool (OST), which is an online facility used for submitting the AFS, GIS, Sworn Statement for Foundations (SSSF), General Form for Financial Statements (GFFS), Special Form for Financial Statement (SFFS), and other reportorial requirements.

This year, the Bureau of Internal Revenue (BIR) has also issued Revenue Memorandum Circular (RMC) 43-2021, which provides the revised guidelines on the use of the eAFS facility in the submission of duly filed Income Tax Return (ITR) and its required attachments, including BIR Form No. 1709. The eAFS was launched with the goal to encourage every taxpayer to utilize digital channels in complying with tax responsibilities. Also, with the BIR’s EFPS, the filing of tax returns and payment of tax liabilities by large corporate taxpayers, professionals, and individuals may now be done through BancNet’s multi-bank payment gateway, wherein transactions are done through the internet, so individuals and corporations can do away with the traditional paper-based filing of tax returns and enjoy the convenience of paying various monthly and quarterly taxes in the comfort of their homes or offices. Although this would seem convenient for taxpayers, there are still some issues in the filing of the necessary returns, especially during tax season. The BIR’s platform may still have issues in terms of bugs or delays in accepting the duly filed and paid returns online. These challenges, as anticipated, would still be improved on the part not only of the BIR, but also of taxpayers and businesses. Again, it is still a good practice for taxpayers to file their taxes in advance.

On October 22, 2021, the BIR has likewise issued an advisory which provides an additional ePayment channel of AABs along with Landbank, DBP, UnionBank, PesoNet, Globe GCash, and PayMaya. It is the I-Pay MYEG Philippines, Inc. (IPMP) Online Payment Facility, a certified Taxpayer Software Provider and a taxpayer agent using credit card and mobile wallet. Just a reminder for taxpayers using these channels: a minimal transaction or convenience fee may be imposed for each transaction.

On December 16, 2021, the BIR also issued RMC 125-2021, which provides that corresponding tax payments on electronically filed One-Time Transactions (ONETT) may now be paid through Landbank’s Liz.Biz Portal, DBP’s Pay Tax Online, and UnionBank’s Online Web and Mobile Payment Facility.

The rebirth of digitalization during the pandemic is really an efficient initiative of various government agencies. The move to digitalization is a response of the government in this trying time, and at the same time, should serve as a booster for taxpayers and businesses to still comply with their tax and compliance responsibilities. As mentioned, although this initiative has its own birth pains, taxpayers must take advantage of these boosters and file the necessary applications and taxes in advance.

Let's Talk Tax is a weekly newspaper column of P&A Grant Thornton that aims to keep the public informed of various developments in taxation. This article is not intended to be a substitute for competent professional advice.

 

As published in BusinessWorld, dated 21 December 2021

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