• By The Financial District

BIR EYES RUSSIAN BEST PRACTICES FOR IMPROVED TAX COLLECTION

Officials of the Bureau of Internal Revenue (BIR) and the Federal Tax Service (FTS) of Russia have met recently to discuss the latter’s best practices that could be applied in the Philippines to further improve its tax administration and compliance.

On orders of Finance Secretary Carlos Dominguez III, BIR officials met last January 13 with FTS Deputy Commissioner Dmitry Volvach via Zoom to also explore a possible bilateral cooperation agreement between the revenue agencies of the two countries.


Dominguez earlier requested then-outgoing Russian Ambassador Igor Khovaev in February last year for assistance in helping the BIR set up a tax data capture program for its value-added tax (VAT) collection effort that is similar to Russia’s highly efficient system.


At that time, Ambassador Khovaev said that Russia had shared its VAT collection technology with other countries and would assist the BIR in its effort to improve its system.


In a report to Dominguez during a recent Department of Finance (DOF) Executive Committee (Execom) meeting, BIR Deputy Commissioner Arnel Guballa commended Russia’s tax administration system, which, he said, uses artificial intelligence and data analytics to capture taxpayers’ information.


“We had an initial meeting with the Federal Tax Service of Russia, represented by their Deputy Commissioner Dmitry Volvach. They have good tax administration. They started their digitalization in 2016 and, after 5 years, they are now into capturing almost all the data of taxpayers,” said Guballa in his report.


Guballa said they learned from the FTS that it now audits only 1 out of 7,000 taxpayers as a result of Russia’s well-placed and efficient system that encourages people to comply with tax laws.


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.


It is expected to be rolled out nationwide in the fourth quarter of 2021, said Guballa.


Guballa said the IRIS launching forms part of the deliverables this year under the BIR’s long-term Digital Transformation Program.



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