B2B Payments

Asia Pacific Ramps Up eProcurement Push

Latin America is often considered to be the world leader in electronic invoicing thanks to government mandates, but the Asia Pacific region is quickly gaining steam in its eInvoicing efforts, too.

With government agencies working to combat tax evasion and fraud, eInvoice mandates mean a reduced risk of invoice fraud and greater visibility into trade and transactions. These invoice mandates can emerge in various ways, often in the form of requirements in how government suppliers bill those agencies in a broader push to digitize procurement.

The latest Asia Pacific country to introduce such a mandate is the Philippines. Earlier this year, the country published the Philippine Digital Transformation Strategy 2022 initiative, a guide that explores government systems’ path to digitization.

According to recent reports in Inquirer, the Philippines’ Department of Finance announced in June that it aims to complete the nation’s eInvoicing system by the end of 2022. At the time, Finance Assistant Secretary Antonio Lambino II spoke in Washington, D.C. on the benefits of an eInvoicing mandate, noting that it would address the nation’s current tax challenges.

The Philippines’ current tax system tends to “overemphasize controls and monitoring over the welfare of taxpayers and the overall ease and efficiency of compliance,” he said, according to reports.

“Progress has been made in modernizing information technology services for taxpayers,” he stated. “However, further reforms are needed. The Bureau of Internal Revenue, in partnership with the government or Korea, is set to complete the development of the eInvoicing system by the end of 2022.”

It is unclear exactly what role South Korea will play in the Philippines’ migration toward eInvoice requirements — or why. But according to Lambino, in addition to benefits of efficiency for taxpayers, an eInvoice mandate will result in cost savings for government agencies and enable officials to operate with greater adaptability in the face of technological disruption.

On Monday (Aug. 5), separate reports noted that in addition to the Philippines’ collaboration with South Korea, the country is slated to launch its government invoice mandate later this year for government procurement operations.

As the Philippines prepares for that eInvoicing system to go live, other areas of the Asia Pacific region are embarking on their own initiatives to encourage eProcurement digitization.

As reported in GPM Institute, Singapore recently became the first Asian country to join the European Commission’s eInvoicing initiative to promote the exchange of electronic invoices across national borders.  And beyond government efforts, FinTechs in the private sector are also promoting eProcurement digitization in the region.

Last week, eProcurement technology provider Zycus announced its support for the Asia Pacific region by hosting the upcoming APAC chapter of the company’s conference Horizon 2019 later this week. While the company did not offer details on its thoughts on APAC eProcurement, the company’s focus on the market signals opportunity for eInvoicing and eProcurement FinTech players to promote digitization of these processes. Further, later his year the Asia Pacific Procurement Congress is slated to hold its event in Singapore to explore the opportunities and challenges of eProcurement.

But for all its initiatives to push for digitization, the region isn’t without its challenges.

A recent survey of 600 industrial buyers in China, Japan and Thailand revealed that companies often value their offline B2B relationships just as much as their digital ones, a finding by UPS Inc. that could signal reluctance for B2B procurement to make the digital shift.

“What we see in Asia is that business relationships are not one-dimensional — online channels are popular, but so, too, are more traditional forms of buying,” Said UPS Asia Pacific vice president of marketing Sylvie Van Den Kerkhof in a statement last month.

Additionally, reports on Monday (Aug. 5) unveiled an ironic twist in the region’s eProcurement efforts: the government of New Zealand, which is slated to host the Asia-Pacific Economic Cooperation forum in 2021, has reportedly failed to follow its own government eProcurement guidelines, with the Auditor General calling into question millions of dollars in spending related to the hosting of the event, according to Newsroom.co.nz.

“There can’t be a hunt or a sniff of inappropriate procurement around it — this is going to be hundreds of millions of dollars of government expenditure,” said the country’s foreign affairs spokesperson Gerry Brownlee in an interview with the publication.

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