OFFICIALS of the Bureau of Internal Revenue met with Russia’s Federal Tax Service (FTS) to explore a possible bilateral cooperation agreement to help the Philippines set up tax data capture system.
BIR officials met last January 13 with FTS Deputy Commissioner Dmitry Volvach via Zoom to discuss FTS’s best practices that could be applied in the Philippines in a bid to improve its tax administration and compliance.
The meeting came almost a year after Finance Secretary Carlos G. Dominguez requested Russian Ambassador Igor Khovaev for assistance to help the BIR set up a tax data capture program for its value-added tax collection effort, similar to Russia’s “highly efficient” system.
Back then, Khovaev said Russia would assist the BIR in its effort to improve its system, adding that it has already shared the VAT (value-added tax) collection technology with other countries.
BIR Deputy Commissioner Arnel SD. Guballa reported during a recent Department of Finance (DOF) Executive Committee meeting that Russia’s tax administration system uses artificial intelligence and data analytics to capture taxpayers’ information.
With this system in place, FTS now audits only 1 out of 7,000 taxpayers because of Russia’s system, which encourages people to comply with tax laws, Guballa said.
“They have good tax administration. They started their digitalization in 2016 and, after five years, they are now into capturing almost all the data of taxpayers,” Guballa said in his report.
Last January 15, the BIR launched its Internal Revenue Integrated System (Iris), which will serve as the agency’s central tool and repository to process taxpayers’ information. Guballa said the Iris would be rolled out nationwide in the fourth quarter.
He added the launch of IRIS is part of the BIR’s long-term digital transformation program.
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