December 6, 2018 — The Bureau of Internal Revenue launched its newest project aimed at improving tax administration. Dubbed “eTSP Cert Program”, it will allow third party tax software providers to certify the forms that they will electronically file to the BIR, providing another option to taxpayers when it comes to tax compliance.
Held at the Fairmont Hotel in Makati, the eTSPCert event was attended by several personalities from the government and business sector, media, tax and technology solutions provider.
Current eFiling Options
Today, there are three ways on how taxpayers file taxes in the Philippines: 1. Manual, 2. eBIR and 3. eFPS. For payments, the BIR provides ways to pay taxes electronically namely: 1. eFPS, 2. GCash, 3. Landbank’s LinkBiz, and 4. DBP’s PayTax online portal.
According to Lanee C. David, BIR Deputy Commissioner of the Information Systems Group, there has been a significant increase in e-filing since the rollout of eBIR and eFPS. As of October 2018, electronic filing of tax returns has accounted for 17.4 million, or 80% of the total 21.7 million returns filed. Payment thru debit, prepaid and ATM cards totaled 309 million this year alone, which is 36 times larger than last year’s collection of 8.5 million, while credit card tax payments for this year totaled 11.5 million, 14 times higher than last year’s credit card collection of Php 820,000.
Despite these options, statistics show that only 56% of the 2.9 million filers file electronically and 17%, or 2.8 million out of 16 million payment transactions were paid electronically. David mentioned there’s a lot of work to be done and that we need to address the possible reasons why the 44% opted to file manually.
Introducing the eTSP Cert Program
The BIR has seen the increasing number of software companies offering tax filing and payment packages in the recent years. David reiterated that the Bureau is gratified that software developers and entrepreneurs have taken notice of the importance of tax compliance on the operations of corporate enterprises and that there is an impending need to further ease the compliance burden to our taxpayers. However, she recognizes the need to ensure that these tax filing and payment software packages confirm with the BIR’s data structure requirements and standards for security.
Thus, the eTSP certification program.
Developed by the USAID through E-PESO, the Electronic Tax Software Provider Certification or simply known as eTSPCert is the latest tax program initiated by the Bureau of Internal Revenue which aims to formally acknowledge third party TSPs (Tax Software Providers) as an alternative for Filipinos when it comes to electronic filing and payment of BIR tax forms.
This initiative was conceptualized by the United States Agency for International Development (USAID) years ago, and after the implementation of electronic payments in October 2017, the idea was finally reimagined, thus turning into one of the BIR’s most awaited programs.
Software providers and developers can now have the tax forms they produce be certified by the BIR for electronic filing. Simply apply online through the portal developed by USAID for BIR. According to Deputy Commissioner David, the application process is seamless, end to end, with zero contact between the applicant and BIR personnel. After submitting the required documents, the software provider will receive the documentation to create the required files compliant with the BIR’s data structure requirements.
Part of this application process is an option to process electronic payments. If selected, the software provider has to select a partner authorized agent bank who will serve as the tax payment processor. A list of authorized agent bank partners is provided in application portal.
With the eTSPCERT, taxpayers from all over the country would be able to utilize tax preparation tools made by TSPs that have passed this certification process.
Deputy Commissioner David hinted on the implementation of PESONet and InstaPay, Philippine’s version of automated clearing house (ACH) by the first quarter of 2019, as a means to pay taxes. This will be exciting and beneficial to taxpayers as ACH payments have proven to be less costly compared to other electronic payment options. We’re also waiting for the outcome of TRAIN part 2 as well as the tax amnesty bill that is now in the Senate. Both initiatives may have an impact on tax administration and compliance, that can be felt as early as first quarter of 2019.
For now, allow us to celebrate this milestone. We’ll be back on the drawing board tomorrow!