MANILA, Philippines — The Bureau of Internal Revenue is bringing artificial intelligence deeper into Philippine tax administration, teaming up with Ayala Corporation to develop an AI-powered assistant designed to help revenue officers navigate the country’s increasingly complex body of tax rules faster and more consistently.
The system, called “Terry the Tax AI Assistant,” is being developed to help BIR personnel retrieve, cross-reference and analyze tax regulations, revenue rulings, issuances and other official tax materials without having to manually search through large volumes of documents.
The partnership was formalized on August 25, 2026, with BIR Commissioner Charlito Martin Mendoza representing the tax agency and Karl Kendrick Chua, head of Ayala Corporation’s Data Science and Artificial Intelligence Group, representing the conglomerate.
Ayala to provide the AI system at no cost to BIR
Under the six-month collaboration, Ayala will work with the BIR to establish Terry at no cost to the government agency, while BIR employees will participate in testing, validating and refining the system.
The partnership also includes knowledge-transfer activities intended to give BIR personnel the skills needed to understand and eventually continue improving the technology themselves.
That could prove just as important as the AI itself.
Instead of relying indefinitely on an outside technology provider, the project is designed to build internal capability inside the tax bureau—a potentially significant step as artificial intelligence becomes increasingly embedded in government administration.
What exactly will Terry do?
Unlike a general-purpose chatbot, Terry is being designed around official BIR materials.
The system is expected to create a structured and searchable knowledge base capable of producing citation-based and source-grounded responses, meaning officials should be able to trace an AI-generated answer back to the underlying tax regulation, ruling or BIR issuance supporting it.
That distinction is critical in tax administration, where a seemingly minor difference in wording or interpretation can affect audits, assessments, compliance obligations and potentially millions of pesos in liabilities.
The BIR’s goal is not merely to make searches faster. Officials say AI could reduce the amount of time revenue personnel spend locating and cross-checking rules, giving them more time to interpret regulations, resolve complicated cases and implement reforms.
But AI will not decide tax cases
Despite the technology’s growing role, the BIR is drawing a clear boundary around what Terry will—and will not—do.
Commissioner Mendoza stressed that artificial intelligence can help officials assemble the legal and regulatory basis for decisions, but judgment and accountability will remain with BIR personnel.
That safeguard could become one of the most closely watched aspects of the program.
AI systems can rapidly search and synthesize enormous collections of documents, but they can also produce incorrect or misleading answers if information is incomplete, outdated or interpreted improperly. Grounding the system in official BIR references and requiring human officials to make final decisions is therefore central to the project’s design.
Part of a much bigger BIR digital overhaul
Terry is not an isolated technology experiment.
The project forms part of the BIR’s broader DARES reform agenda, whose priorities include Digital and Data Transformation, Audit Reform and Accountability, Revenue Collection and Base Protection, Employee Empowerment and Welfare Promotion, and Service Excellence and Stakeholder Engagement.
The bureau has already been accelerating several digital initiatives.
In July, the BIR expanded its electronic Tax Clearance System nationwide, allowing qualified taxpayers to submit requirements, track applications, make payments and download certain tax clearance certificates online.
The agency has also been pursuing projects involving a taxpayer portal, electronic tax residency certificates, electronic taxpayer identification initiatives and other systems aimed at moving more transactions away from traditional manual processing.
The AI partnership with Ayala therefore represents another layer of that transformation—this time focusing not only on how taxpayers interact with the bureau, but also on how BIR employees themselves process and interpret information.
Why Ayala’s involvement matters
Ayala Corporation’s role brings private-sector data science and AI expertise into one of the government’s most important revenue agencies.
Chua said the project is intended to help government personnel work more efficiently while improving the clarity, consistency and speed of tax-related services.
For Ayala, the arrangement also fits a broader emphasis on partnerships between government and private enterprise in areas where technology and infrastructure can strengthen public institutions.
But Terry’s real test will come after development.
A successful AI system would have to do more than produce quick answers. It would need to consistently locate the correct tax authority, identify changes in regulations, distinguish between potentially conflicting issuances and provide references that revenue officials can independently verify.
The bigger story: AI is entering tax enforcement
The immediate objective may be faster research, but the significance of the project could eventually go much further.
Tax authorities around the world are increasingly using data analytics, automation and artificial intelligence to improve compliance, identify irregularities and manage enormous amounts of financial information.
For the Philippines, Terry represents an early but significant move toward incorporating AI directly into the day-to-day work of tax administration.
For now, however, taxpayers should not expect an AI bot to determine what they owe or decide the outcome of an audit.
Terry is being built as an assistant to BIR officials—not a replacement for them.
And that distinction may ultimately determine whether the bureau’s latest digital experiment becomes merely a faster search engine—or the foundation for a much broader transformation of Philippine tax administration.
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