The Bureau of Internal Revenue (BIR) in the Philippines is aiming to boost its revenue through digitalization and a crackdown on tax leakages. BIR Commissioner Romeo D. Lumagui Jr. is optimistic about hitting the collection target of P3.046 trillion ($59.86 billion) next year, with efforts focused on curbing tax leakages and improving efficiency through the digitalization of services.
To achieve this, the BIR plans to implement measures and programs that will help reach the collection target for 2024, which is P407 billion ($8.01 billion) higher than the goal for this year. The bureau is particularly interested in collecting taxes on online or digital transactions and strengthening its dialogue with online platforms and sellers.
The BIR disclosed its plan to start collecting a 1-percent withholding tax from online sellers by the fourth quarter of this year. Moreover, the 2024 National Expenditure Program (NEP) includes the collection of about P107.52 billion ($2.12 billion) from new and expanded tax measures, including nearly P17 billion ($335 million) from value-added tax on digital service providers.
Lumagui highlighted the bureau’s intention to expand its workforce, although he noted that creating additional positions would require government scrutiny and processes. The BIR aims to address the growing needs resulting from an increasing number of taxpayers while the number of BIR personnel remains constant.
Despite the constraint in hiring more staff, the BIR will accelerate its efforts in digitalization with the aim of reducing the number of physical transactions conducted at its offices by half before the end of the year. Lumagui emphasized the importance of automation through digital transformation to address the lack of manpower.
The BIR plans to migrate some of its transactions online, eliminating the need for taxpayers to physically visit offices. However, Lumagui acknowledged that some taxpayers prefer face-to-face transactions, even with online services available.
Plugging the gap in excise tax collections is a priority for the BIR since the government fails to capture around 20 percent of the total collections. Lumagui is confident that this figure can be more than halved by the end of this year, as the BIR takes aggressive measures in its enforcement activities.
For instance, the BIR intends to require importers and manufacturers of juices used in vape products to secure an Authority to Release Imported Goods (ATRIG) from the BIR. This move would allow the BIR to monitor and regulate the importation of raw materials used in vape juice production.
The BIR remains focused on achieving its revenue targets through a combination of efforts, including digitalization, crackdowns on tax leakages, and enhanced enforcement activities.
