Carlos G. Dominguez
Secretary of Finance
Mr. John Law, Charge d’Affaires of the Embassy of the United States of America in the Philippines; Finance Undersecretary Mark Joven; Commissioner Caesar Dulay of the Bureau of Internal Revenue; Deputy Commissioner Lanee David; fellow workers in government; guests: Good morning.
Today, we are on the road to the full digitalization of the Bureau of Internal Revenue. This is a leading policy thrust of the Duterte administration.
Since President Duterte took office in 2016, it has been our main goal to push for the digital transformation of our main revenue agencies to dramatically improve their services and boost our collection performance.
I am happy to note that both the Bureau of Internal Revenue and the Bureau of Customs have embraced digitization as a key component of their comprehensive administrative reform programs.
Before the pandemic struck, the digital reforms instituted by the Bureau of Internal Revenue led to significant improvements in the country’s tax effort. Tax revenues as a percentage of our GDP rose to 14.5 percent in 2019 from 13 percent in 2015. This was our best performance in more than two decades.
Under the leadership of Caesar Dulay, the Bureau introduced additional electronic channels for the filing and payment of taxes, making them more accessible and convenient for our taxpayers.
In 2019, total revenues collected through the digital channels reached 1.83 trillion pesos, representing 84 percent of the total collections of the Bureau for the year. This amount was 54 percent more than in 2015. There were already more electronic filers at 58 percent of all taxpayers in 2019 versus 25 percent in 2015.
The taxes enabled us to sustainably fund the Build, Build, Build program and provide more and better social services for our people. It is through the hard work of our revenue agencies that we have continued to vigorously implement our priority programs and services.
With our robust tax effort, we faced the pandemic with strength on the fiscal front. The Philippines was financially ready when COVID-19 struck.
Our experience during this pandemic underscores the importance of rapidly upgrading our digital transactions systems. Cashless payments zoomed over the past few months. Fortunately, our revenue collections system was well into the process of digitization.
Last year, our revenue collections were understandably lower due to the slowdown of economic activity. To encourage tax compliance, the Bureau of Internal Revenue made it more convenient for our taxpayers to access online transactions by launching an additional e-payment channel through their mobile phones. It likewise simplified and enhanced the tax forms deployed in its electronic system.
Along with continued improvements in tax administration, these digital reforms proved to be an advantage. Amid the pandemic, we have collected most of our revenues through electronic means.
In 2020, 85 percent or 1.66 trillion pesos of the total collections of the agency were coursed through electronic channels. This was 44 percent higher than in 2015. Meanwhile, almost a hundred percent of the tax returns filed last year were done online.
These figures are projected to dramatically increase in the coming years as the Bureau of Internal Revenue accelerates its digital transformation.
President Duterte has said that taxes are the lifeblood of government programs and public services. In this critical time, we need to boost and keep our lifeblood flowing. Now more than ever, we need more revenues to fund not only our COVID-19 response, but also our economic recovery program.
A highly efficient revenue collection system, therefore, is critical to help us recover strongly from this pandemic and build back the best possible future for our people.
Our aim is not merely to have a state-of-the-art system in our data management. We seek to be at the cutting edge in the application of new technologies to achieve the best revenue performance.
The grant agreement we signed today with the United States Trade and Development Agency provides much-needed financing assistance for pushing forward with the digital transformation of the Bureau of Internal Revenue.
I thank the people and the government of the United States, represented here by Chargé d’ Affaires John Law, for supporting our efforts to harmonize the Bureau’s information and communication technology infrastructure.
Your support will make the Bureau of Internal Revenue a more effective agency. It will keep the agency abreast with the rapidly advancing financial technologies. It will dramatically improve the agency’s organizational capacity and collection efficiency.
We look forward to more collaboration with all our partners in this comprehensive modernization effort.
I assure you that the administrative reforms that we will be instituting in the Bureau of Internal Revenue, through your help, will be fully functional and irreversible.
Thank you very much.
-oOo-