E-invoicing has potential to curb corruption, but gov’t tech capacity an issue – Deloitte

Deloitte Philippines said the electronic invoicing (e-invoicing) system has the potential to curb corruption and restore public trust by improving transparency in tax transactions. Carlo Navarro, Tax & Legal Leader at Deloitte Philippines, told BusinessWorld that digitizing transaction data and enabling systems to track appropriate tax amounts would enhance data transparency and reduce opportunities for corruption. According to Navarro, transparency and automation can reduce the scope for the Bureau of Internal Revenue (BIR) to impose arbitrary tax adjustments and for taxpayers to face undue harassment for additional taxes. He explained that with digitized transactions and automated tax payments and assessments, reduced interaction between tax authorities and taxpayers would also curb demands for under-the-table compensation. However, he stressed that implementing the e-invoicing system requires appropriate technology, technical personnel, and clear guidance for taxpayers. The BIR needs to secure the right technology and personnel to operate the system, and without them, risks could arise for both the government and taxpayers. He also pointed out that taxpayers' lack of knowledge is partly due to the government's unclear guidance, necessitating further clarification and communication. Deloitte Philippines suggests that the government should leverage private companies for system rollout to address these challenges. Navarro noted that it would be difficult for the government to successfully implement the system alone, considering all potential risks and budget constraints, citing the framework of accredited private technology companies used in other countries. The Philippine government has already initiated its private company accreditation process. Revenue Regulations (RR) No. 11-2025 initially mandated covered taxpayers—including small, medium, and large e-commerce businesses and large taxpayers—to issue electronic invoices by March 2026. The deadline was later extended to December 31, 2026, via RR No. 26-2025. Electronic sales reporting will become mandatory once the BIR establishes a system capable of receiving and processing the required data and issues separate regulations.