Carlos G. Dominguez
Secretary of Finance
I congratulate the Bureau of Internal Revenue, led excellently by Commissioner Caesar Dulay, for launching more electronic payment channels for our taxpayers.
Much has changed since the onset of the pandemic. In a very short time, transactions migrated from in-person to digital formats. Fortunately, the Duterte administration decided earlier on to begin shifting government processes to digital technologies. Our agencies began setting up their databases and putting their services online. Our financial system had started setting up the hardware and the networks for real-time settlement of transactions.
More critically, our revenue agencies — the Bureau of Internal Revenue and the Bureau of Customs — began their digital transformation early. When the pandemic struck, our taxpayers were able to file and pay their tax returns digitally. Our ports continued to facilitate trade.
To demonstrate its far-reaching impact, about 90 percent of the total number of annual income tax returns were filed electronically in 2020. This grew to almost 100 percent in 2021. This is a major breakthrough given the fact that only 10 percent of the country’s taxpayers made use of digital tools to file their income taxes in 2015 before our administration took over.
From the 1.9 million electronic payment transactions made with the Bureau in 2015, this number rose to 4.0 million in 2020, representing an increase of 110 percent. Electronic payment transactions in the first ten months of 2021 even grew to 4.6 million.
Our decision to digitalize government processes early on helped us respond to the difficulties presented by the global health emergency. The pandemic forced the government to scale up spending to protect lives and preserve the health of our people. Through the difficult months, our two main revenue agencies continued to function effectively, bringing the revenue flows our government direly needed.
In fact, our revenue agencies performed better than expected. Although revenue collections were down in 2020 due to the lockdowns that curtailed economic activity, the combined tax collections of the Bureau of Internal Revenue and the Bureau of Customs were 14 percent higher than their target.
In the first 10 months of 2021, the combined tax collections of the Bureau of Internal Revenue and the Bureau of Customs were already 9 percent higher than the same period of last year’s level, and they have been exactly as projected.
The reliability of revenue flows enabled the government to fight the pandemic with confidence. Those revenues helped fund our social alleviation measures to protect the most vulnerable communities, supported our health response and economic stimulus measures, and provided financing for our economic investments for our people. All these were made possible by early transitioning to digital processes.
I am happy that the Bureau of Internal Revenue is determined to expand its digital payment facilities. We must not stop innovating to align our processes and standards with the best tax collection services in the world. With the support of the private sector and our development partners such as the United States Agency for International Development, this comprehensive digitalization initiative will make revenue collection more efficient and reliable, thereby helping build more solid foundations for our economic recovery.
A more digitally adept Bureau of Internal Revenue will certainly help the broader effort to make our governance systems more responsive. This will be consistent with the goal of making our economic development more inclusive.
With the vaccination program proceeding in scale, we are confident that we can contain this pandemic and whatever variant the virus spawns as soon as possible. We recognize this virus will eventually be endemic and we can best manage it by our people exercising responsibility for their health while the government invests more in a more robust public health system.
In its remaining months, the Duterte administration is determined to do all it can to modernize our governance. This will be one of the best legacies we will leave to our people.