DOF proposes centralized collection system via BIR

MANILA, Philippines — The Department of Finance (DOF) has proposed that all government collection – whether taxes or contributions – be coursed through the Bureau of Internal Revenue (BIR) as part of efforts to centralize business transactions in the country.

Finance Secretary Carlos Dominguez said the DOF is looking into models on how to improve the efficiency of funds managed by state-run insurance providers, especially the Social Security System (SSS), Government Service Insurance System (GSIS), including the Philippine Health Insurance Corp. (PhilHealth).

Dominguez said the DOF is proposing to transfer all collection mandates of other government agencies to the BIR to centralize the inflow of funds going into the government.

“We have to maximize fund efficiency by improving contribution collection. Similar to the payroll tax in the US, we are looking at the possibility of having one agency collect all the contributions instead of each institution doing its own,” Dominguez said.

“Like most countries imposing the payroll tax, we can have the Bureau of Internal Revenue, for instance, collect for these institutions. Better management of social security funds will be one of the lasting legacies of the Duterte administration,” he said.

When pressed on whether that would mean the abolition or downsizing of either the SSS, GSIS or PhilHealth, Dominguez said the agencies can retain their human resources for as long as they deploy the affected workers to other tasks.

The finance chief said it is important for the government to simplify its business transactions in a bid to attract investors to locate their operations or expand their activities in the country.

Centralizing the collection system, Dominguez said, would enhance government efforts to improve the ease of doing business in the country. “I’m not saying downsizing the number of employees because they can be redeployed to other functions servicing the institutions. It will help the public to deal with only one collector agency,” Dominguez said.