The Bureau of Internal Revenue's digitalization drive is a good program that has the support of the business sector, but the bureau must make sure the initiative does not increase administrative work and raise costs for micro, small, and medium enterprises, an industry executive said.

Ferdinand Ferrer, trustee for the electronics sector of the Philippine Exporters Confederation, Inc., said during the trade group's recent general membership meeting that the export and industry sectors are backing the BIR's digital transformation because it will promote transparency and ease of doing business.

The revenue collection agency, discussing its digitalization program at the PHILEXPORT's GMM last September 12, said it has identified dozens of automation projects designed to improve its processes. These projects are now in various stages of progress, with some being partially implemented, and others either being procured or conceptualized.

Ferrer, however, urged the BIR to make sure these projects are MSME-friendly, noting the difficulties faced by small businesses, particularly with the implementation of the Electronic Invoicing System.

The EIS is an electronic platform developed by the BIR with the capability to receive, process, and store data from taxpayers. The project is currently on a pilot run involving 100 large taxpayers.

Ferrer said MSMEs, which represent 99.6% of all businesses in the country or about 910,000 enterprises, are worried because the EIS involves the need to develop middleware, computer software that acts as a bridge between an operating system or database and applications, especially on a network.

"The large taxpayers have the resources. They have their IT department. They can buy the middleware…. But kaming mga maliliit na negosyante… it is up to us to buy or develop our own middleware to communicate with the BIR system to send our data," he said.

He said the private sector is requesting that the BIR develop a system to help the over 900,000 MSMEs comply with the EIS requirements.

Similarly, lawyer Rule Amethyst Oporto, senior director for business tax services at SGV & Co., said at the same forum that the cost of developing the middleware is the top concern of small taxpayers.

Both Ferrer and Oporto also asked whether the BIR system is ready to cope with the submission of data by the taxpayers once the EIS becomes fully operational.

BIR Assistant Commissioner Maria Luisa Belen replied that the agency is on top of this matter and looking for more options for MSMEs.

"Right now there are 62 taxpayers out of the 100 pilot taxpayers that we have identified [and] continuously they are transmitting, and in our server, there are around 200 million invoices already stored. So the next step of the bureau is to look for enhancement, expanding the system itself to cover more taxpayers who were identified."

She said that for MSMEs not yet ready with the software, "we have a web-based system that they can enter and transmit an electronic invoice to the BIR."

Moreover, she shared that there are service providers willing to develop the software to enable MSMEs to transmit their invoices to the EIS.

"Those things we're exploring. [The service providers] are already scheduled to make a demo for our technical team inside the BIR," Belen added.

Finally, Ferrer said he hopes that it will be made easier for Philippine-located companies to embrace digitalization for ease of doing business.

He remarked on how comparatively easier it is to do business in other ASEAN countries, and the business sector hopes this will also be the case in the Philippines, "but unfortunately now [enterprises] are saddled with more administrative work."

He further said: "We are in favor of improving our tax laws and attracting investors to the Philippines because we need the foreign direct investments and technologies here in the Philippines. But we should make it easy for exporters, especially in export zones, to be able to work with the BIR."