Digital means for various payment transactions proved to be an efficient channel as highlighted by the current pandemic, the National Tax Research Center (NTRC) said in its latest study.
“The adverse effect of the COVID-19 pandemic has, more than ever, highlighted the importance of a digitized tax administration not only to ensure the safety of tax authorities and taxpayers from the threat of the virus, but also as a means to effectively collect taxes,” the NTRC said.
“Thus, both tax authorities and taxpayers should maximize the use of payment systems to help the government collect the much-needed taxes especially at this time of pandemic to foster (economic) growth,” it added.
While at it, the state think tank recognized barriers for such development, including the country’s Internet connectivity issue, the lack of reliable and secure payment infrastructure, and the public’s lukewarm attitude towards digital payments.
Further, the NTRC cited the need to ensure the efficient and effective implementation of payments systems involving cross-border online transactions to ensure that nothing escapes the country’s taxation.
In terms of electronic payments or e-payments adoption in government transactions in the region, only Singapore and Malaysia revealed a mature environment for public e-services.
“The Philippines ranked 55 out of 73 countries in the study with an overall score of 58.2, which implied an intermediate environment for public e-services, the same level as Indonesia, Thailand and Vietnam,” it explained.
According to NTRC, the general public’s persistent mindset that cash remains the fastest and safest way to settle their transactions was the primary factor that contributed to the slow adoption of digital payments in the country.
“As of 17 July 2020, there are 98 operators of payment system (OPS) with certificates of registration with the BSP (Bangko Sentral ng Pilipinas), including G-cash and Paymaya, while 25 OPS have a provisional license,” it quickly added.
BSP Governor Benjamin Diokno earlier announced his goal of having a cash-lite society by 2023, having at least 50 percent of financial transactions done digitally from just 10 percent in 2018.