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The International Monetary Fund (IMF) and the US’ Millennium Challenge Corporation (MCC) signed Wednesday an agreement aimed to further help the Philippine government in its bid to implement tax administration reforms.

In a statement, IMF said this is the first time it will team up with MCC for this purpose. IMF, through its Fiscal Affairs Department, will provide the technical assistance while MCC will provide US$ 4.6 million to help the Bureau of Internal Revenue (BIR), enhance its revenue administration policies and procedures,

“The funding is part of MCC’s US$ 434 million poverty reduction compact with the Republic of the Philippines, which includes a US$ 54.3 million investment to computerize and streamline business processes in the BIR,” it said.

Under the agreement, MCC’s budget will pay for a resident advisor to the BIR as well as short-term technical assistance missions by IMF experts to address BIR’s technical tax administration issues.

The 40-month project aims to improve effectiveness of revenue collection and address corruption.

An IMF assessment mission will arrive in Manila in November while the resident advisor is expected to work with the BIR before the year ends.

“The IMF will submit an annual report to MCC on the BIR’s commitment to reform beginning in early 2012,” the statement said.

IMF Deputy Managing Director Murilo Portugal, who signed the partnership agreement in behalf of the IMF, said they “warmly welcome the United States as a donor to the Fund’s technical assistance program.”

“We are looking forward to working together for the benefit of the Philippines,” he said after the signing ceremony in Washington D.C.

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