Bureau of Internal Revenue officials meet with International Monetary Fund experts at the BIR National Office on Sept. 4 to discuss data-driven approaches to tax compliance risk management. Courtesy: BIR
The Bureau of Internal Revenue (BIR) is sharpening how it detects potential tax compliance problems by using data to determine which industries and taxpayer risks require greater attention.
An assessment involving selected BIR field offices pointed to construction, retail, tourism and e-commerce as among the sectors showing recurring compliance concerns, according to the agency.
The findings were discussed when BIR officials, led by Commissioner Charlito Martin Mendoza, met International Monetary Fund experts at the bureau’s National Office on Sept. 4.
Rather than applying the same enforcement approach across taxpayers, the BIR is seeking to use risk assessments to identify areas where government resources and compliance measures could have the greatest impact.
Under the proposed approach, national officials would establish common standards for identifying and prioritizing risks, while field offices could develop responses based on conditions within their jurisdictions.
Mendoza said better information and analysis could allow the bureau to address significant compliance concerns more precisely while making it easier for taxpayers to meet their obligations.
The initiative is also aimed at narrowing the tax gap, or the difference between taxes that should be collected and the amount actually received by the government.
The IMF engagement forms part of efforts to strengthen the BIR’s own capacity to analyze taxpayer behavior and move toward a more risk-based system that balances enforcement with voluntary compliance.