The Bureau of Internal Revenue (BIR) and the International Monetary Fund (IMF) are working to strengthen the agency’s Compliance Risk Management (CRM) system through a data-driven approach aimed at identifying and addressing major taxpayer compliance risks.

BIR Commissioner Charlito Martin R. Mendoza led a recent meeting with IMF experts at the BIR National Office to discuss the operational implementation of CRM and initial findings from CRM activities conducted in selected BIR field offices.

Need for a centrally managed CRM framework

The discussions highlighted the need for a centrally managed CRM framework that would provide clear direction on how the BIR identifies, prioritizes and addresses compliance risks.

At the same time, regional offices would be allowed to tailor compliance measures based on the risk profiles of their respective areas.

“Compliance risk management helps us understand where the most significant compliance risks are so we can respond more precisely. With better data and risk assessment, we can focus our resources and interventions where they are needed most, while making compliance easier across the taxpayer base,” Mendoza said.

“The goal is to strengthen our own capability to identify and analyze compliance risks, determine the appropriate response, and continuously improve how we manage taxpayer compliance,” Mendoza said.

The meeting was attended by members of the BIR Management Committee and other key officials, along with IMF experts Supriyo De, Paul Duffus and Xavier Mitchell.

Initial findings identified recurring compliance risks and common high-risk sectors, including construction, retail, tourism and e-commerce.

Risk-based, data-driven approach

The BIR said its continuing engagement with the IMF supports its shift toward a risk-based and data-driven approach to tax administration. Under this approach, the bureau can direct resources and compliance interventions toward identified risks while encouraging voluntary compliance and improving revenue administration.

The initiative is also intended to help the BIR reduce the tax gap and strengthen public trust by improving how it identifies and responds to taxpayer compliance risks.

The BIR and IMF have continued to coordinate on tax administration and revenue reforms in the Philippines. In December 2025, the IMF said Philippine authorities were engaging in technical assistance focused on improving VAT efficiency, reviewing tax expenditures and strengthening tax administration.