Revenue Administration Reform Activity (RARA)
Electronic Tax Information System (eTIS) Sub-Activity
2013 started with the submission of the proposals from four (4) bidders for the Repair and Enhancement of the Electronic Tax Information System (eTIS). After careful deliberation by the Bids Review Committee with 2 international consultants as members, the project was awarded to Indra Philippines.
Indra kicked off the project on April 2013 and immediately conducted requirements gathering from BIR users to validate the repairs identified. The rest of the year was spent by Indra fixing the modules of the previously delivered system to BIR. By November, Indra started with the User Acceptance Tests of the repaired Registration module.
To support eTIS, the Independent Assurer (IA) was also awarded to Pricewaterhouse Coopers (PWC) India in December 2013. The IA will provide independent validation and verification of the deliverables of Indra Philippines. The IA will also conduct independent software testing of the modules repaired by Indra Philippines. PWC India will also provide technology transfer to BIR personnel so that the BIR can conducts its own independent validation and verification and software testing to their other on going information technology projects.
Preparatory work on the Change Management to support eTIS was also continued. The Change Management Consultant will address the concerns of eTIS stakeholders (i.e. users) with regards to their resistances and anxieties on the use of the new eTIS system. This will facilitate the smooth organizational transition of the BIR to new technologies, IT systems, work methods, and the use of workflow-driven information systems. The CM Consultant will also provide training related services such as training design and development as well as training coordination, monitoring and evaluation. Soft skills training to eTIS-1 end users will also be conducted by the CM Consultant. The bidders are expected to submit their proposals by February 2014 and the winner selected by April 2014.
2013 also continued the Consulting engagement of former BIR Commissioner Guillermo L. Parayno as Project Management Consultant, to assist the Project Management and Implementation Service (PMIS) in leading and managing reform activities within the BIR. As part of his work, Comm Parayno organized a workshop in December 2013 dubbed as “Checkpoint: Quezon City” to validate the features of eTIS.
Consultants from the US Treasury Office of Technical Assistance (UST OTA) started their engagement in January. The focus of the engagement was to assist BIR in re design their priority tax forms and assisting BIR in the resource planning of their Document Processing Divisions (DPDs).
There were 3 missions undertaken for the redesign of the forms resulting in the conversion of ten (10) forms into Optical Character Reader (OCR) ready forms. These forms included the Annual Income Return Form 1700 series (6 forms are in these series), Monthly VAT Declaration Form 2550M, Monthly Percentage Form 2551M, Monthly Remittance Return Form 1600, Monthly Remittance Return Form 1601C and Quarterly Income Tax Form 1701Q.
Four (4) missions were conducted to assist BIR in planning the resource requirements for their DPDs. As of December 2012, BIR has 4 DPDs located in Baguio City, Caloocan City, Quezon City, and San Pablo City. BIR has plans to increase these DPDs to 19, with each Regional Revenue having its own DPD. The UST OTA Consultant assisted BIR in planning the optimum resources required for the existing 4 DPDs and for the rest of the 15 DPDs.
In May 2013, a workshop was conducted involving the top BIR Management and all the Regional Revenue Directors to set the direction of the establishment of 19 DPDs by the end of 2014.
The engagement of the UST OTA was completed in December 2013 and another contract will be entered in 2014 to continue its work in assisting BIR in setting up nineteen (19) DODs by December 2014.
Automated Auditing Tools (AATs) Sub-Activity
After the inauguration of the Computer-Assisted Audit Tools and Techniques (CAATTs) laboratory in BIR and the full renovation of one of the training rooms in the BIR National Training Center in 2012, continuous trainings have been conducted.
Courses on Basic and Advanced Audit Command Language (ACL) courses have been conducted for BIR personnel belonging to the Large Taxpayers’ Service (LTS). Seven (7) batches of trainings have been completed for LTS personnel and 1 batch of training for the regional offices have been conducted in 2013.
With the training and through the use of the audit tools, the LTS has completed the processing of the 2011 taxable year masterfile. LTS used a script using ACL to automate the audit procedures with minimal personnel intervention.
Public Awareness Campaign (PAC) Sub-Activity
2013 also saw the awarding of the second component of the Revenue Administration Reform Activity in the BIR. The Public Awareness Campaign is a three year project and for the first year, the PAC aims to increase the awareness of the Self Employed Professionals of their tax obligations. The evaluation of four (4) bidders through a “pitch” process was undertaken in August. The project was awarded in September 2013 to JWT Philippines because of the innovative strategy they pitched during evaluation period. The PAC will be in two (2) phases, a public information campaign centered on a catchy song detailing the tax obligations and procedures on how to fulfil these obligations. The second phase is an emotional television commercial that highlights the burden that tax evaders cause to fellow Filipinos who pay their taxes correctly. The campaign will break in February and March of 2014, in time for the April 15 tax deadline.
Revenue Integrity Protection Service (RIPS) Activity
January started with the re-launching of the procurement for the Business Process Consultant (BPC). The Consultant shall analyze the current business processes of RIPS and identify and solve bottlenecks, redundancies, procedural gaps and other inefficiencies. The Consultant shall also draft and finalize the TOR for the Development of the RIPS Information System (RIPS IS). The Pre Proposal Conference was conducted in March and the contract was awarded to Pricewaterhouse Coopers (PWC) India in May. The rest of the year saw consultations happening between the PWC India Consultants and pertinent RIPS and Department of Finance (DOF) personnel. By December, PWC India has completed the Inception Report and As-Is Reports. The To-Be Process Report and the RIPS IS Terms of Reference are under review.
The RIPS Information System will consist of a Case Management System (CMS) to monitor the complaints, investigations, cases filed and their resolutions. It also has an Electronic Document Management System (EDMS) to handle the digitized Statements of Assets, Liabilities and Net Worth (SALNs) and Personal Data Sheets (PDS) of all personnel of the DOF personnel and all its attached agencies (like the BIR and BOC).
The centrepiece of the RIPS is the Automated Investigation Tool (AIT) that will assist RIPS in identifying SALN related violations. By analyzing the digitized SALNs and PDS, the AIT will be able to detect sudden increases in net worth, or disproportionate assets to income ratio and other similar anomalies in the SALNs of employees. The RIPS IS will be operational in the first quarter of 2015 and will be the first analytical anti-graft and anti-corruption system in the Philippines.
As part of the output of the Intelligence Gathering Tools and Techniques training undertaken by RIPS personnel, it was recommended that surveillance vehicles and equipment be provided to RIPS to enhance its intelligence gathering capabilities. In May 2013, two (2) Toyota Innova Asian Utility Vehicles and one (1) Mitsubishi Strada pick-up were purchased and delivered to RIPS. This was followed by the delivery in June of surveillance equipment such as binoculars, telephoto lenses and teleconverters. In July, a motorcycle was procured and delivered to RIPS to add to their surveillance vehicles. In August, the final batch of surveillance equipment in the form of cellphones was delivered to RIPS.
In August, RIPS conducted the operational audits in the BIR and the Bureau of Customs (BOC). RIPS was able to complete the operational audit of BIR but because of the reorganization of top BOC management, RIPS was not able to conduct the closedown meeting with the relevant BOC personnel.
In September, a new Executive Director, Atty. Jude Romano joined RIPS. Atty Romano has extensive prosecutorial experience from the Department of Justice and from his experience as an International Prosecutor in the Prosecutor’s Office of Bosnia and Herzegovina.
With the new Executive Director on board, RIPS conducted the first phase of their Strategic Planning. Highlights of the planning included the presentation of accomplishments and goals of the RIPS Division and the direction of the new RIPS management. The second phase of the Strategic Planning is scheduled on February 2014.