A digital tax payments system recently launched by the Bureau of Internal Revenue (BIR) using the PESONet electronic funds transfer service will save the government some P230 million per year in transaction fees in processing taxes paid online.
A report submitted by the BIR to the Department of Finance (DOF) also bared that this new interoperable digital bills facility aims to shift over 15 million tax payment transactions collected over the counter annually to the PESOnet online tax payments service, making the duty of paying taxes convenient, efficient and less costly for taxpayers.
DOF Finance Undersecretary Antonette Tionko said this represents more than 80 percent of the total number of tax payment transactions processed by the BIR each year, in sync with President Duterte’s directive to cut red tape and improve the ease of doing business for the benefit of the public and the investor community.
Tionko said the BIR had bared in its report that the savings of P230 million will come from the lowering of transaction fees charged by authorized agent banks (AABs) from P40.00 to P25.00 under the PESONet-enabled facility.
Launched by the BIR last Aug. 15, the PESONet-enabled payment facility will allow millions of taxpayers to pay internal revenue taxes digitally, anytime, anywhere, through digital channels provided by banks.
The BIR launched the facility in partnership with the Bangko Sentral ng Pilipinas (BSP), Bureau of the Treasury (BTr), Land Bank of the Philippines (LandBank), and the payments industry.
This tax payment service is currently available only via LandBank and the Rizal Commercial Banking Corp. (RCBC). But the DOF plans to expand the service to include other AABs as well as other bills and utilities.
Finance Secretary Carlos Dominguez III said after the project launch that, “the BIR has launched a digital tax payments system allowing Filipinos to conveniently pay their taxes online using the electronic funds transfer service PESOnet, in line with the Duterte administration’s goal to cut red tape and improve the ease of doing business to better serve the public and attract more investors.”
The PESONet interoperable digital bills payment service is the latest payment infrastructure introduced by the payments industry under the National Retail Payment System (NRPS) policy framework of the BSP.
PESONet, which can transact fund transfers electronically in large batches, has over 40 participating banks under its wing.
Through the E-PESO project, the United States Agency for International Development (USAID) closely worked with the BSP, BIR, BTr, LandBank and private sector partners, including the Philippine Payments Management, Inc. (PPMI), RCBC and the Philippine Clearing House Corporation (PCHC), to set up the PESONet tax payments service.
The goal of the E-PESO project is to set up an interoperable digital bills payment service that is safe, reliable, efficient, and will benefit a greater number of Filipinos, Dominguez said.
With the soft launch of the PESONet digital tax payments service, the BIR will be the pilot “biller,” while the tax collection/payment will be the pilot “bill.”
A Household Payments Baseline Survey conducted in 2016 showed that 73 percent of Filipinos pay their household bills (e.g. utility bills), and about 9 percent of them pay the government directly for taxes, social security contributions, business permit fees and licenses, and permit fees.
Both businesses and individuals make 4 million monthly payments to the government for taxes, business permit fees, licenses, and social security contributions with an estimated value of $3.87 billion, the same survey showed.
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