The Department of Finance (DOF) is leading the preparation of the Tax Administration Transition Plan for the Bangsamoro Autonomous Region in Muslim Mindanao (BARMM) which includes the establishment of a digitalized tax system for efficient payment and collection of revenues in the region.

“In line with our ‘Taxpayer First’ policy, this plan ensures a seamless and efficient transition for all taxpayers in BARMM. BARMM holds a unique advantage by building a comprehensive digital system now as they are starting from scratch. They can learn and skip all the mistakes that the national government encountered. They can go straight to digital,” Finance Secretary Ralph G. Recto said.

“We fully support the success of this transition as efficient and effective tax administration is crucial to the genuine development and fiscal autonomy of BARMM, as well as to our inclusive growth as a nation” he added.

The Intergovernmental Fiscal Policy Board (IFPB) approved the creation of an Operational Working Group (OWG) to lead the crafting of the Tax Administration Transition Plan during the 7th National Government-Bangsamoro Government Meeting on September 3, 2024.

The IFPB is co-chaired by Finance Secretary Recto and Bangsamoro Government Minister of Finance, Budget and Management (MFBM) Ubaida C. Pacasem.

The Board was created under the Bangsamoro Organic Law (BOL) to deal with revenue imbalances and fluctuations in the regional financial needs and revenue-raising capacity of the BARMM.

The BOL states that the BARMM shall enjoy fiscal autonomy, and have the power to create its sources of revenues as provided under this law.

A Tax Study Group (TSG) was created by the IFPB for this matter in May 2020, including the creation of the Bangsamoro Revenue Code to ensure the region’s long-term sustainability.

As the chair of the TSG, the DOF-Revenue Operations Group (ROG) is leading the discussions on the Tax Administration Transition Plan.

This plan covers the transition of tax administration functions from the Bureau of Internal Revenue (BIR) to the Bangsamoro Revenue Office (BRO) including the sharing of the BIR’s registration and other relevant systems in view of the enactment of the Bangsamoro Revenue Code.

Composed of DOF-ROG, the BIR, and MFBM-BARMM, the TSG will conduct regular meetings and submit two proposed guidelines by September this year for review by the IFPB.

To date, the TSG reported that it has so far completed 80% of its deliverables for the BOL including the guidelines on the share of the Bangsamoro Government in national taxes, fees and charges collected in the BARMM; and the implementing rules and regulations on the payment of national internal revenue taxes by corporations, partnerships or firms.