A day after April 15, we look back at the implementation of the BIR's new electronic platform to review what happened and learn from them so that we can improve on next year's taxpayer filing experience.
#1: TOO LITTLE TIME
The BIR issued the regulations mandating the use of eBIR forms by certain types of taxpayers less than a month before April 15. While the eBIR forms have there since September of last year, a mandatory taxpayers can choose between offline and online forms for filing. Without warning, the BIR suddenly prescribed the use of electronic filing for mandatory eBIR forms taxpayers.
As such, there was not enough time for the BIR to conduct much-needed taxpayer education and do a cascade/training of the new policy with its personnel on a nationwide basis. This led to widespread confusion among taxpayers and even among BIR personnel.
Solution: The BIR should have an action plan with reasonable working timeline to implement major projects, such as this mandatory electronic filing for certain categories of taxpayers. Said plan should include among its activities the consultation of various stakeholders in order to anticipate possible issues and concerns from their end. Taxpayer education is also one critical success factor for implementation.
#2: NATIONAL OFFICE VS. RDOS
While the BIR National Office was saying one thing, BIR RDOs were telling taxpayers another thing. In particular, while it was clear to the BIR National Office that only those seven (7) taxpayer types indicated under mandatory coverage of eBIR forms are required to do electronic filing, the BIR RDOs were requiring all taxpayers to do use eBIR forms and do electronic filing. There was a breakdown in communication, possibly due to the lack of cascade/training of BIR personnel given the limited time to implement.
Solution: Proper training and cascade of the new policy and procedures among BIR personnel would help prevent miscommunication and minimize confusion between offices.
#3: DISCRIMINATION BY TECHNOLOGY
IT experts have raised concerns that the BIR electronic platform largely discriminates against many Filipinos because of its preference for certain technologies -- e.g., operating system (Windows vs. Mac), web browser (Internet Explorer vs. Google Chrome), etc. This is unfortunate because an electronic tax filing platform should be able to accommodate as many taxpayers as possible to make it more useful.
Moreover, not all taxpayers, especially those with low-income and "No Payment" tax returns, would be computer-literate or would have access to computers. They would have to shell-out money to go to internet cafes, as the BIR even suggested, or hire someone to encode the tax return for them just to be able to comply with the BIR's electronic filing requirement.
Solution: The BIR should design the system to make it more technology agnostic. This is to enable most, if not all, taxpayers to access and utilize its system.
#4: THE BURDEN OF NO PAYMENT
Taxpayers with "No Payment" tax returns bore the brunt of the BIR's new electronic filing rule. The electronic platform was supposed to give them convenience in filing their tax returns -- i.e., they need not go to the BIR anymore to line up since they can file the returns in the comfort of their homes (or internet cafes). However, "No Payment" taxpayers could include just about every individual taxpayer. Thus, the BIR had to belatedly issue a clarification via an RMC that senior citizens, persons with disabilities (PWDs) and employees filing form 1700 are exempted from the mandatory coverage of the electronic filing requirement.
Still, many other "No Payment" taxpayers ended up wasting much of their time waiting and trying hopelessly to e-file their tax returns, only to be told two (2) days before the deadline that they can already file their returns manually using the old pre-printed or PDF/Excel file forms. There would have been a lot of rejoicing if not for the major caveat that came along with it -- that they would have to re-file the same tax returns electronically on or before June 15, 2015.
Solution: The BIR should consider excluding taxpayers with "No Payment" tax returns from among those subject to the mandatory coverage of electronic filing. This is to ease the burden of low-income and low-risk taxpayers from being subject to this administrative burden.
Alternatively, the BIR may require mandatory electronic filing only for certain specific categories of individual taxpayers (e.g., those business establishments with sales of XX amount, medical professionals, legal professionals, etc.), which have the resources to comply and which the BIR would like to monitor more closely. This targeted approach will be more acceptable, rather than an all-in approach for "No Payment" tax returns.
#5: LAST MINUTE RMCS
From the time that the BIR's regulation on electronic filing was published on March 17, 2015, the BIR issued 11 Revenue Memorandum Circulars (RMCs) just to clarify the various issues and concerns raised by taxpayers. Foremost among these is RMC 10-2015, which was dated March 24, 2015 while, the latest among these is RMC 20-2015, which was issued in the afternoon of April 15 itself.
Given that many ordinary taxpayers would not have immediate access to all these RMCs, they largely remained uninformed until after such time, which was already way too close to the deadline and cut-off time. This greatly ran the risk of many taxpayers being subject to the P1,000 penalty and 25% surcharge.
Solution: The BIR should clearly communicate its policies and procedures prescribed under the governing regulations. There should also be consultation with stakeholders to ensure that most issues and concerns would be properly considered. This is to avoid any misinterpretation or several further clarifications of the provisions under the regulations.
#6: SYSTEM BONKERS
What is very critical in the implementation of any new IT system is its readiness and actual capability to deliver what it promises -- that is, ease of use and convenience to the taxpayer. However, much is lacking from the eBIR platform, as evidenced by system time-outs and inability of taxpayers to access the system at all. Even the individual ITR forms were not available at all in the online eBIR forms.
Meanwhile, EFPS taxpayers, who had long been used to the use of an electronic platform, experienced a a complete stand-still in their electronic filing and/or payment procedures two (2) days before the April 15 deadline. This could have been due to the volume of transactions being processed that day, considering the number of new EFPS taxpayers added by the BIR and many tax deadlines falling due on the same day -- i.e., annual ITR, quarterly ITR for individuals, and various types of withholding tax returns.
Considering the value of tax payments that these EFPS taxpayers contribute (being large taxpayers and top 5,000 individual taxpayers), the BIR had to announce manual work-around procedures to allow manual filing and payment on the day itself so as not to miss out on EFPS collections.
Solution: The BIR should ensure that the system properly works as described under its regulations and other issuances. There should also be adequate testing of the system capability prior to implementation, especially if it involves a significant increase in the volume of transactions to be processed. This is to avoid having a system-breakdown right in the middle of the most critical filing and collection deadline during the year.
#7: BIR CONVENIENCE
BIR issuances on the new eBIR platform contain policies and procedures, which seem to have been prescribed more for the convenience of the BIR while, putting so much burden on the part of taxpayers. At times, they fail to consider how much time and effort it would take a taxpayer just to comply with their requirements.
Most significant among these is the requirement for mandatory eBIR form taxpayers to re-file electronically on or before June 15, 2015 the manual returns they already filed on or before April 15. Manual filing came about as a work-around procedure due to technical problems arising from the BIR electronic platform. It was clearly not the fault of the taxpayer that the system was not yet ready for his use on or before April 15. However, he had to rework on his ITR by having it refiled electronically after all the efforts of having it manually filed. What is even worse, the same penalty will be imposed for failure to refile, similar with not being able to file on the April 15 deadline.
Solution: The BIR should be more taxpayer-centric by developing policies and procedures, which make it simpler and easier for taxpayers to comply with their tax obligations. This is the only way for the BIR to encourage greater compliance and, in the process, generate higher tax collections. Many individual taxpayers actually take time out and put in a lot of effort just to fulfill their honorable duty to pay their taxes, contrary to some perception that many are simply tax cheats. May the BIR encourage them through simplification of tax policies/procedures and improved taxpayer service.
With all these in mind, let us honor today all the taxpayers, who bravely navigated and survived through this eBIR forms saga. Let us also honor the tireless BIR personnel, who served beyond duty during the most critical times.
Our only hope is that we learn from all of these things and work on a more taxpayer-convenient April 15 tax season next year!
