Remarks by Lawrence Hardy II, Mission Director, Formal Launch of the BIR-DBP Pay Tax Online Service

Thursday, October 19, 2017
Lawrence Hardy II, Mission Director, Formal Launch of the BIR-DBP Pay Tax Online Service

[As Prepared]

[Greetings]

It is a great honor to be here at the start of my second month in the Philippines as the new Mission Director of the United States Agency for International Development, commonly known as USAID. USAID is the lead U.S. government agency that works to end global poverty and enable democratic, resilient societies to realize their potential. As part of U.S. Embassy Philippines, I bring you the greetings of the U.S. Ambassador, the Honorable Sung Kim.

I am pleased to join everyone here today at the formal launch of the Pay Tax Online service, an online electronic payment, or e-payment, facility for internal revenue taxes. This e-payment platform is the product of a strong partnership between the Bureau of Internal Revenue and the Development Bank of the Philippines, with support from USAID. The U.S. government, through USAID, is delighted to support the Philippine government’s growth-enhancing tax administration and governance reforms as part of our shared goal of broad-based and inclusive growth for Filipinos.

I would like to congratulate BIR, on behalf of USAID, for their striking improvements in tax administration in recent years. For example, in 2013, e-filing rate was less than 10 percent. By 2016, this increased to close to 70 percent, and is expected to reach 80 percent by the end of 2017. By 2016, total tax revenues reported through e-filing stood at 1.4 trillion pesos, marking an impressive increase of close to 600 billion pesos in just the past three years. It is also encouraging to see that as filing taxes online has become easier, tax compliance has increased by more than 30 percent since 2013.

The new GCash mobile payment facility, which BIR launched in April 2016 with USAID support, has made it easier and less costly for taxpayers to pay their taxes. And I am impressed to learn that since April 2016, BIR has already collected more than 30 million pesos through the new GCash mobile payment application, which is nearly a 150-fold increase from collections between 2005 and 2016 using the old mobile application.

These reforms have dramatically boosted tax collections, which increased by an amazing half a trillion pesos from 2013 to 2016.

These successes give the Philippine government greater capacity to invest in the country’s urgent development priorities. Increasing tax collections means that — with the government’s responsible commitment at all levels — more Filipinos will have access to high quality social services that they need and deserve. This can also translate to more roads, transport systems and other public infrastructure that will increase the mobility of goods and people, connect rural and urban communities, and thereby expand economic opportunities for all.

It is encouraging that despite these gains, you are not standing still, because we all agree that “HINDI pa tayo TAPOS.” (We are not finished yet.) I admire your energy and ambition to achieve more. Today’s launch of the Pay Tax Online service reflects the Philippine government’s readiness and strong commitment toward greater efficiency, improved transparency and enhanced public service delivery.

The reforms that we have jointly worked on will greatly benefit taxpayers in the Philippines. With e-filing functionally in place, GCash mobile payment increasingly used, and the Pay Tax Online going live starting today, taxpayers need not travel to BIR offices and wait in long queues. They can just file and pay their taxes online from the comfort of their homes, offices or anywhere with internet service, day or night.

I am confident that the Bureau of Internal Revenue will greatly benefit from these reforms. For example, collecting taxes will be less costly, tax compliance will increase, financial transactions will be more transparent and tax information will be more accurate. These improvements will help the BIR to generate more revenue that will in turn help the government to expand services to its citizens.

For the country as a whole, the adoption of electronic services in tax transactions, such as this Pay Tax Online facility, will further improve the ease of doing business in the Philippines, a commitment under the current administration’s 10-point socio-economic agenda. It is worth noting that in the World Bank’s 2017 Doing Business Report, the Philippines’ ranking on paying taxes jumped five notches since 2016. This Pay Tax Online e-payment facility, together with streamlined and automated tax business processes will further contribute to improving business climate in the Philippines.

Further, more channels for electronic payment in both the public and private sphere helps the Philippines move from a cash-based to a cash-lite economy. According to a 2016 McKinsey Global Institute report, digital finance could increase the gross domestic product of emerging economies by as much as 6 percent.

We at USAID remain committed to supporting the Philippine government’s tax policy and tax administration reforms, as well as public financial management reforms. Under our Facilitating Public Investment project, we continue to work with the Departments of Finance and Budget and Management to increase fiscal performance, improve public expenditure management and promote greater fiscal transparency. We have been pleased to walk alongside BIR as it becomes a well-financed, more efficient and more effective tax administration with processes and practices aligned with international standards.

Under the E-PESO project, USAID continues to collaborate with the public and private sectors to support the Philippines’ goal of increasing the use of e-payments. This will improve transparency in the government’s financial transactions and reinforce greater accountability.

Before I conclude, I wish to congratulate the BIR and the DBP for rolling out this Pay Tax Online facility. I also commend BIR for your efforts in pursuing tax administration and governance reforms. The adoption of electronic filing and payment of taxes are steps in the right direction to simplify tax compliance, make it easier to do business in the country and boost government collections that can be used to tackle the Philippines’ development challenges. This is a critical element to accomplish our shared goals of bolstering investments, driving down poverty and advancing inclusive economic growth.

As I close, I would like to leave you with this challenge, or “HAMON:” I urge you to sustain these gains as responsible champions of reforms that are built on the principles of economic efficiency and good governance. We are honored to work alongside you as we move toward our shared vision of a more prosperous and stable Philippines.

Maraming salamat po.

Issuing Country 

Last updated: October 25, 2017

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