en.Wedoany.com Reported - A study by the Philippine Institute for Development Studies (PIDS) shows that cities with fully automated business permit processing have seen significantly higher growth in local business tax revenue compared to those that have not yet automated.
The study, titled "The Role of E-Government in Philippine City Fiscal Revenue," is based on data from 138 cities and was conducted by PIDS Senior Research Fellow Tatum Ramos and Vice President Marife Ballesteros. The study found that a fully automated Business Permit and Licensing System (BPLS) is associated with an 18.16 percentage point increase in local business tax revenue growth, and that such cities also have more active registered business establishments, suggesting that simpler permitting and compliance processes may encourage business creation and expansion.
Under a digital permitting system, businesses can submit applications online, make payments through banks or e-wallets, obtain official electronic receipts, and in some cities, receive permits online or via courier delivery. The study cited practices from local governments such as Caloocan, Makati, Quezon City, and Valenzuela, which have saved business owners from multiple trips to city halls. The study argues that automation can both improve tax administration and make business compliance easier.
However, the study also lists factors hindering the rollout of automation: inadequate ICT infrastructure, limited local fiscal resources, a shortage of IT personnel, internal resistance to change within institutions, and taxpayers' continued preference for face-to-face transactions. The researchers emphasized that infrastructure gaps are the core bottleneck, limiting both the internal use of digital tools by government agencies and public access to online services. Data show that stronger internet connectivity significantly increases the likelihood of a city operating a fully automated BPLS; in 2021, 90.83% of establishments used computers and communication equipment, 80.96% had internet access, but only 38.39% used the internet to make payments to government agencies, indicating that the use of online government services remains quite limited.
The study recommends expanding ICT infrastructure coverage, enhancing the technical capacity of local governments, integrating local platforms with the eLGU system of the Department of Information and Communications Technology, and improving interoperability among government agencies. The authors also noted that if these barriers are not overcome, the benefits of e-government will be difficult to realize. The study further suggests that the Philippines' recently enacted E-Governance Act holds potential as a tool to accelerate digital transformation and harmonize national and local government systems; the impact of fully automated BPLS on local government revenue is becoming increasingly evident.
