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  • Writer: Ziggurat Realestatecorp
    Ziggurat Realestatecorp
  • Jan 3
  • 4 min read

In the modern world, data is king. Every step taken creates a data footprint, and the ability to capitalize on this is crucial —with tax authorities and businesses being no exception.


As businesses generate voluminous data, there is growing recognition that tax and finance departments require robust digital infrastructure to run effectively. Globally, regulatory authorities globally recognize that the ability to collect and analyze taxpayer data is key to bridging the tax gap.


Taxpayers, meanwhile, are expected to provide tax and financial data through more rigorous regulatory and compliance requirements. There is also a pivot to ensuring that they implement effective financial and tax governance frameworks, guaranteeing data accuracy and the rigorous enforcement of company tax policies.


The Organization for Economic Cooperation and Development's vision on tax digitalization, i.e., Tax Administration 3.0, supports the view that digital transformation has the potential to expand the tax system in an increasing number of areas.


Throughout Southeast Asia, meanwhile, governments are enhancing their tax systems with digital frameworks. As noted by the Asian Development Bank, post-pandemic tax reforms across the region have prioritized digitalization to strengthen economic recovery and improve efficiency in tax administration.


Singapore, Malaysia, and Indonesia have implemented advanced compliance systems. Beyond e-filing and payment systems, tax authorities are now exploring new technologies like big data, blockchain, biometrics, and artificial intelligence.


In 2020, Thailand launched a value-added tax (VAT) refund mobile app that allows tourists to make VAT claims. The system uses blockchain technology to record and track claims and purchases, enhancing data integrity and efficiency.


This year, Indonesia announced the Core Tax System, which enables the automation and digitalization of tax administration and provides an integrated network for more informed, data-driven decisions.


The Philippines joined the Inclusive Framework on Base Erosion and Profit Shifting (BEPS) implementation in November 2023. The framework implements measures to tackle tax avoidance and equip governments with instruments to minimize profit shifting to low-tax jurisdictions that erode a country's tax base.


To maintain membership, the Philippines will need to implement "minimum standards" to combat harmful tax practices. Modernizing its existing tax framework from both technical and technological standpoints will be crucial. This should incentivize the Bureau of Internal Revenue to accelerate its digital transformation with more urgency.


Digital transformation is included in the Philippine Development Plan 2023-2028. The country has taken steps toward digitalization through initiatives like e-invoicing, aligning with the region's digital trends. Observing these regional advancements can help Philippine companies anticipate the future direction of tax systems.


As for Philippine companies, they need to adapt their digitalization strategies in key areas such as transfer pricing (TP) and Pillar Two rules to align with other countries in Southeast Asia.


TP involves setting prices for transactions between related parties within multinational enterprises to ensure these prices adhere to the arm's length principle (i.e., prices are set as if between unrelated parties). This aids in the fair allocation of taxable income across jurisdictions.


TP also impacts a company's profitability, operational structure, and fiscal efficiency. Technology plays a critical role in monitoring pricing and financial outcomes, structuring or restructuring business to achieve fiscal efficiencies, and meeting compliance obligations.


Meanwhile, Pillar Two rules — also known as the Global Anti-Base Erosion Model Rules (GloBE) — are transforming the tax landscape by applying a 15-percent global minimum tax across all countries where a company operates. This requires advanced data management and comprehensive analysis of tax positions.


Pillar Two forms part of BEPS 2.0, together with Pillar One, which introduces a new approach to taxing the digital economy.


Adopting a digital strategy does not require a complete redesign of a company's finance system architecture. It can focus on targeted, point-based solutions that could address immediate concerns but with a broader, overarching strategy in mind.


For Philippine companies, digital transformation in tax compliance and TP goes beyond mere automation. It involves building a strategic digital framework that enables an organization to pre-empt, pivot or keep pace with technological advancements and regulatory shifts.


Developments in TP and BEPS 2.0 necessitate rethinking the future of the finance function. Digital tools streamline complex data processes, automate calculations, and improve documentation accuracy — meeting the intensive data requirements of regulations such as the GloBE rules.


Companies need to move away from siloed, manual processes and embrace a more integrated approach across tax, finance, and operational functions. The top priority for tax transformation is ensuring the integrity of data across various use cases.


By leveraging automated data extraction and integration, companies can build a single, unified data source, reducing manual errors and enhancing the efficiency and timeliness of financial, tax and TP calculations. A tech-enabled tax and TP infrastructure facilitates data-driven strategic decision-making for businesses. It also enables data analytics to preempt potential tax issues before they reach the desks of regulatory authorities.


Embarking on a digital transformation journey requires assembling many moving parts. However, the benefits that can be realized along the way are substantial. For Philippine companies, proactive technology investment is essential to address the growing complexities of tomorrow's tax and transfer pricing frameworks.


Source: Manila Times

  • Writer: Ziggurat Realestatecorp
    Ziggurat Realestatecorp
  • Dec 11, 2024
  • 2 min read

Real-time digital payments are projected to provide banking access to nearly 21 million unbanked Filipinos and contribute to economic growth, according to a report by global payments software provider ACI Worldwide.


The report that ACI published in partnership with London-based economic consultancy firm The Centre for Economics and Business Research used data from 40 countries to try to establish an “empirical link” between real-time payments and financial inclusion.


Real-time digital payments are projected to provide banking access to nearly 21 million unbanked Filipinos and contribute to economic growth, according to a report by global payments software provider ACI Worldwide.


ACI said that boosting financial inclusion by promoting instant payments could contribute an additional $323 million to the Philippines’ gross domestic product (GDP) by 2028.


Meanwhile, the estimated increase in banked Filipinos presents a profit opportunity of $28.7 billion for Philippine financial institutions by 2028, which ACI calculated “based on the typical customer lifetime value estimated at $1,375.“


The report that ACI published in partnership with London-based economic consultancy firm The Centre for Economics and Business Research used data from 40 countries to try to establish an “empirical link” between real-time payments and financial inclusion.

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Digital payments: Its profit prospects for banks


Globally, ACI said instant payments are expected to contribute an additional $285.8 billion to global GDP and create more than 167 million new bank account holders by 2028.


“The rise of real-time payments has the potential to open up banking access to millions of new customers, presenting significant growth and profit potential for banks that capitalize on this to modernize and streamline payment technology and services,” said Leslie Choo, senior vice president at ACI.


Latest data from the Bangko Sentral ng Pilipinas (BSP) showed that the share of digital payments to total retail payment transactions in the country had grown to 52.8 percent in 2023, from 42.1 percent in 2022.


It was a feat that exceeded the expectations of the central bank, which hoped to digitalize 50 percent of retail payments in the country by 2023. This, in turn, bodes well for the BSP’s goal to capture 70 percent of adult Filipinos into the formal financial system by 2023.


The central bank had said its next goal is to digitalize 60 to 70 percent of retail payments in the country by 2028.


“Real-time payments have asserted their role as a powerful enabler for societal transformation, bridging critical gaps in financial access and empowering millions of Filipinos,” Choo said


Source: Inquirer

  • Writer: Ziggurat Realestatecorp
    Ziggurat Realestatecorp
  • Nov 20, 2024
  • 2 min read

The Philippine digital economy is expected to maintain its growth trajectory, driven by e-commerce and the continued development of digital infrastructure.


The e-Conomy SEA report by Google, Temasek Holdings and Bain & Co. found that the Philippine digital economy is projected to grow 20% to $31 billion in terms of gross merchandise value (GMV), making it the fastest-growing digital economy in Southeast Asia.


The report also reiterated earlier market-size forecasts for the Philippines of $80 billion and $150 billion in GMV growth by 2030.



E-commerce will be the main driver for digital economy growth, with the segment projected to post $21 billion in GMV this year, up 23%.


Transport and food are expected to deliver $3 billion worth of GMV this year; while online media and online travel were valued at $4 billion and $3 billion, respectively.

“The increase in digital payment volumes is compelling service providers to maintain competitive fees while enhancing security and service reliability,” it said.


Digital payments are projected to post 22% growth in 2024 to $125 billion in gross transaction value (GTV). By 2030, digital payments are projected at between $200 billion and $300 billion in GTV.


GTV for digital payments includes the value of credit, debit, prepaid card, account-to-account, and e-wallet transactions, according to the report.


Google, the Singapore state investment company Temasek, and consulting firm Bain added that the surge in digital payments in the Philippines is keeping fees competitive while forcing providers to enhance security and service reliability.


“As the digital payments landscape matures and adoption becomes more widespread, e-wallet providers are increasing merchant discount rates,” according to the report.


The expansion of Philippine digital infrastructure is also expected to contribute to the overall digital economy’s growth, with broadband poised to connect even in remote areas.


© Copyright 2018 by Ziggurat Real Estate Corp. All Rights Reserved.

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