BIR to get P815-M budget for information systems upgrade

The Bureau of Internal Revenue (BIR) is getting P815 million in fresh funding to build up its information systems which, once fully activated, would serve as "spyware and tripwire" against tax cheats.

The amount, contained in the proposed 2007 General Appropriations Act, would finance the BIR’s Tax Administration Computerization Project, according to Catanduanes Rep. Joseph Santiago, former chief of the National Telecommunications Commission (NTC).

"We are absolutely convinced the bureau’s full automation would improve efficiency and transparency, enhance the integrity of transactions and discourage irregularities," Santiago said, adding that "inefficiency breeds corruption."

He added that government should spare no expense when investing in systems that would strengthen enforcement and compliance, and detect and deter fraud and abuse in tax programs and operations.

"If we invest P815 million now to upgrade the BIR’s information systems, and in the process, the bureau gets to collect say P2 billion more, this easily translates to a 150-percent return on investment," Santiago pointed out.

If necessary, he said the BIR would enlist the help of the private sector in developing application software that would systematically screen tax returns, and promptly raise red flags.

"In other countries, tax agencies have gone to the extent of developing spyware that can readily spot potential anomalies in returns, which are then subjected to closer scrutiny," Santiago said.

"The US Internal Revenue Service, for instance, thwarted $412 million in fraudulent returns in 2005 with the use a computer program that searched for signs of cheating in every return claiming a refund," he said.

El Segundo, California-based Computer Sciences Corp., a global provider of information technology and professional services, developed the special IRS computer program.

Santiago, meanwhile, stressed the need for the BIR to expand its Electronic Filing and Payment System by consciously encouraging more taxpayers to enlist. He lamented that less than 15,000 taxpayers are now enrolled in the system.

"We have to eliminate if not reduce manual processing, which has led to the rampant diversion of check and cash payments. The more taxpayers filing and paying online, the less opportunity for corruption," he said.

The Ombudsman is now prosecuting dozens of criminal cases involving BIR agents that blatantly withheld or conveyed tax remittances to private bank accounts. – Mary Ann Reyes