Question & AnswerQ&A (BIR REVENUE MEMORANDUM CIRCULAR NO. 58-91)
The new TIN is adopted to develop a unique taxpayer numbering system to replace existing numbering systems such as the TAN, VAT registration number, and withholding agent number. This aims to enable effective computerization, better data integration, and efficient tax administration.
The present TAN lacks unique features required for computerization, does not indicate the taxpayer type or revenue district office, is alphanumeric and long which makes encoding prone to errors, and has been poorly implemented, leading to many duplicates and incorrect uses.
The new TIN is a 9-digit numeric code where the first digit identifies the type of taxpayer (0 for corporation, 1 to 9 for individual taxpayers), followed by seven sequential digits, and the ninth digit is a check digit.
Because of the large number of TANs issued with technical deficiencies and poor implementation, maintaining the TAN system entails unnecessary costs and inefficiencies. The TAN does not serve as a unique identifier suitable for relational database management.
The TIN is shorter, easier to encode, unique to each taxpayer, and functions as a single identifier across all tax types, thereby enabling integration and efficiency in data processing and tax administration.
Different BIR units developed stand-alone application systems for handling their own data, each with its own numbering system such as TAN, VAT registration number, and withholding agent number, resulting in fragmented unintegrated databases.
A numbering system uniquely identifies taxpayers, facilitates sorting and encoding of data from source documents, and generates management information for day-to-day tax administration operations.
There was inefficient data processing, wasted computer capacity, duplication of taxpayer numbers, difficulty in cross-referencing taxpayer records, and difficulties in enforcing tax administration policies effectively.
The National Computer Center (NCC) reviewed and favorably endorsed the TIN with helpful observations. This endorsement is important as it aligns with NCC guidelines for government computerization programs.
The transition involves designing the new TIN structure, educating taxpayers through an information drive, cleaning up existing masterfiles to remove duplicates, and implementing the new TIN to replace the old TAN and other numbering systems as per Revenue Memorandum Order No. 22-91.