The Philippines will implement and Modernized Automated Digital Tax Revenue System

Reported in the Asia Pacific Future Gov, the PHILIPPINES TO MODERNISE REVENUE ADMINISTRATION article published Monday 14^th January 2013.

The Bureau of Internal Revenue is embarking on a US$54.3 million Revenue Administration Reform Project (RARP) which aims to increase tax revenues over time and address issues posed by corruption, tax administration inefficiencies and lack of transparency, by introducing state of the art technologies to enhance the country's overall tax administration system.

The project is funded by the Millennium Challenge Account – Philippines (MCA-P), an office of the independent US foreign aid agency created to help developing nations in their fight against poverty by way of implementing strategic threshold programs.

RARP is composed of the following sub-projects: Electronic Tax Information Systems (ETIS), Automated Auditing Tools (AATs), a Public Awareness Campaign, and an anti-graft investigation unit for the Department of Finance.

The ETIS aims to modernize BIR and provide an enhanced tax administration system that can be fully used by the agency nationwide.

According to MCA-P, this effort will improve the trustworthiness of actions and decisions based on tax data. These, in turn, will improve tax compliance monitoring, reduce client contact and opportunities for negotiated assessments, increase the detection of misreporting and enhance the value of reports. Improved compliance, audit and enforcement tools will contribute to a sustainable program of tax administration leading to increased tax revenue collection.

The bidding process for the implementation of the ETIS is currently underway after the MCA-P formally invited firms to submit their bid documents last November.

Meanwhile, AATs are computer software and hardware for the conduct of computer-assisted audits which promote proper taxpayer compliance in filing and paying taxes.

MCA-P will fund the purchase of software licenses, hardware and subscription to a database service. This initiative will make it possible for tax payers to submit tax records in digital form, thereby reducing by half the number of days it takes to complete a tax audit.

The reduction in man days per tax audit is expected to help BIR reduce its backlog of unfinished audits promote taxpayer satisfaction and ultimately leads to increased revenue collection.

Just recently, revenue officers at the BIR had undergone had a series of training courses to enhance their audit skills in a computerized accounting environment. The training was held at the newly-renovated and furnished Computer-Assisted Training Tools and Techniques (CAATTs) training facility, also part of the AATs sub-project.

This modern automated Tax Revenue system could be a step for a National ID system so every tax payer will pay their taxes automatically using ETIS system. 

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Japan Philippines United for China; Coast Guard & Build Train System Offered

Bullet Train Technology Japan

To Counter China, Japan and Philippines Will Bolster Maritime Cooperation

TOKYO — In a telling sign of how China's rise has helped turn former wartime foes into allies, Japan and the Philippines agreed on Thursday to cooperate more closely on maritime security.

During talks in Manila, the foreign ministers of Japan and the Philippines proclaimed their nations to be strategic partners that would collaborate more in resolving their separate territorial disputes with China, news reports said. They also expressed "mutual concern" over increasingly assertive claims by China that have embroiled both nations, according to Kyodo News.

Japan is in a tense showdown over islands in the East China Sea, while the Philippines has wrangled with China over control of islands and fishing grounds in the South China Sea. The two nations agreed to exchange information and discuss each other's strategies for responding to China, the ministers were quoted as saying. The Philippine minister, Albert del Rosario, said the discussion included a request by his country for 10 new patrol ships from Japan to strengthen the Filipino coast guard.

His Japanese counterpart, Fumio Kishida, was appointed last month by Japan's new conservative Prime Minister, Shinzo Abe. The decision to have Mr. Kishida visit the Philippines for his first trip was seen as a symbolic gesture by Mr. Abe, who has vowed to strengthen security ties with other democracies in the region in an effort to offset China's growing military and political clout.

Mr. Abe has also said he wants to work more closely with the United States and Australia to help bolster the capacity of less-developed nations like the Philippines to stand up to China. While long-pacifist Japan has restricted its aid to mostly nonmilitary purposes, like building up coast guards, its leaders have recently begun loosening some of the self-imposed restrictions. Japan is now in talks about providing training to submarine crews from Vietnam, and last year it gave its first limited military aid to East Timor and Cambodia.

Japan has long supplied development aid in the region, but it has operated carefully to avoid stirring bitter memories of its militarism during World War II, when its forces swept across much of Southeast Asia, including the Philippines, then emerging from its colonial relationship with the United States. However, in recent years Japan's military has slowly raised its profile by joining regional training exercises and holding its first bilateral military maneuvers with Australia and India.

The building of regional military ties represents a significant strategic departure for the country, which after World War II relied for its defense on the United States and the roughly 50,000 military personnel it bases in Japan. For its part, China has pointed to the moves as proof of a resurgent militarism in Japan, which it says is swinging to the right.

News reports said Mr. del Rosario, the Philippine minister, called China's territorial claims in the South China Sea a threat to regional stability.

"We also need to be able to address the possibility that the freedom of navigation would be adversely affected," he was quoted as saying by The Associated Press.

The Japanese foreign minister agreed.

"As the strategic environment is changing, it is necessary for us as foreign ministers to share recognition of the situation," Mr. Kishida said after the talks, according to Kyodo News. Kyodo said that Mr. Kishida also offered development loans to help build a light-rail system and a new airport. (http://nyti.ms/13lTggC)

New York Times 

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Deutsche Bank Says Philippine Economy Will Perform Well in 2013; Warns of ASEAN Overheating

The Philippine economy will likely continue performing well in 2013 on improving external demand, Deutsche Bank's chief economist for Asia-Pacific said Thursday, but warned that the Southeast Asian nation's economy could overheat given that it has been growing faster than its potential in the last three years.

The Philippine central bank, however, could be forced to raise overnight rates three times in 2013 to counter rising inflation, which could help cool the rapid growth, Michael Spencer told reporters at a press conference.

Mr. Spencer said the Philippine economy has grown at a faster clip than its long-run potential of 4.0%-4.5% over the last three years, which puts its gross domestic product level above the full employment potential.

"It has opened [up a] significant positive output gap...and what that implies is it is getting harder to find workers for your shops and factories...and leads to higher cost[s] for business," he said.

Mr. Spencer thinks the Philippines' employment situation--with the latest unemployment rate at 6.8% and underemployment rate at 19.0%--is already tight by the country's standards.

Deutsche Bank forecasts that the Philippines GDP growth rate will reach 5.5% this year and 5.0% in 2014, slower than 2012 mainly due to a higher base of comparison when it estimated growth at 6.3%.

The government is projecting growth of 6%-7% for 2013.

Mr. Spencer is also expecting inflation to accelerate this year due to higher food prices and a growth rate that is beyond its potential, which could prompt the central bank to raise overnight rates by a total of three-quarters of a percentage point in 2013.

This would come after four hikes last year totaling one percentage point. He also expects the central bank to raise rates by a further three-quarters of a percentage point in 2014 before it ends its rate-hiking cycle.

Deutsche Bank forecasts inflation will accelerate to an average 4.6% in 2013 and to 5% in 2014 after averaging 3.2% in 2012.

"We expect inflation to be at the higher end of the central bank's target by the end of this year," said Mr. Spencer, referring to the Bangko Sentral ng Pilipinas' 3%-5% target for 2013.

Mr. Spencer said, however, that if the peso appreciates further, it is possible the central bank wouldn't tighten monetary policy this year. An increase in domestic interest rates without an equal adjustment in the U.S. and other developed economies will further widen the interest rate differential and attract more capital flows. The local currency ended last year at PHP41.05 against the U.S. dollar after finishing at PHP43.84 in 2011.

Sameer Goel, head of Deutsche Bank's Asia rates and currency research, said the bank expects the peso to appreciate to PHP38 against the U.S. dollar by the end of this year and to PHP36.50 at the end of 2014.

Mr. Goel said the relatively high interest rate and the large current account surplus of the Philippines--which averaged 4% of GDP in the last six years and is likely to rise to 4.6% this year and 5% in 2014--are underpinning the strength of the peso.

Although the Philippines' equity market is still performing well in early 2013 following a 33% gain last year, Mr. Spencer warned that the stock market could likely end this year lower as developed markets such as the U.S. and Europe attract more funds due to their recovery, particularly toward end-2013. He said Philippine stocks' valuations are also stretched at this stage after last year's record run of the market.

Many analysts think Philippine stocks are already overvalued. (http://fxn.ws/11idsBC)

Fox Business 

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