Philippines eyes $7.3-M KOICA grant

MANILA, Philippines — The government is considering to tap the Korea International Cooperation Agency (KOICA) for a $7.3 million grant that will be used for the establishment of an electronic invoicing system in the country, according to the Department of Finance (DOF).

In a statement, the DOF said the government is eyeing a possible financing agreement with KOICA for the first phase of implementation of the Bureau of Internal Revenue’s Electronic Receipt, Invoice and Sales Reporting System.

The program is among the measures included under the Tax Reform for Acceleration and Inclusion (TRAIN) Law.

To lay the groundwork for the establishment of such system, the DOF said the BIR, in cooperation with KOICA, is in the process of preparing a feasibility study on the roll out of an e-invoicing program in the country.

Internal Revenue Deputy Commissioner Arnel Guballa, in a recent report to Finance Secretary Carlos Dominguez, said a KOICA team visited the agency and the DOF last year to gather data in preparation for the feasibility study.

Guballa said the BIR, for its part, has also identified the list of 100 taxpayers that would take part in the pilot implementation of the project.

He said the BIR conducted a consultative forum with stakeholders last year, in line with this.

“The review of the final report and the terms of reference of the Asian Development Bank (ADB)-funded consultants are now ongoing for the e-invoicing project,” Guballa also told Dominguez.

Section 237 of RA 10963 or the TRAIN Law provides that large taxpayers and exporters in the country will be required within the next five years to electronically issue their invoices or receipts, as well as report their sales data to the BIR at the point-of-sale.

Earlier, Dominguez said the e-invoicing system is targeted to be put in place by 2020.

He said the government has tapped South Korea considering the country’s expertise in this field.

The DOF had also said the establishment of an electronic receipts system, as well as improvements in the refund structure for exporting firms – both of which are provided under TRAIN – would help pave the way for a value-added tax (VAT) refund system for foreign tourists in the future.

In addition, this would enable the Philippines to catch up with the practice in other countries, as it remains among the member-countries in the Association of Southeast Asian Nations without a VAT-refund system for non-residents.