President Ferdinand Marcos Jr has signed into law a bill making it easier for taxpayers to pay their taxes in a bid to increase the revenues government needs to boost infrastructure spending, Malacanang said yesterday.
“The law will modernize and increase the efficiency and effectiveness of tax administration and strengthen taxpayer rights and allow the government to capture as many taxpayers as possible into the tax net,” a statement of the Presidential Communication Office (PCO) said.
Called the “Ease of Paying Taxes Act,” Republic Act (RA) 11976 simplifies procedures by allowing taxpayers to electronically or manually file tax returns with the Bureau of Internal Revenue (BIR), any authorized agent bank or authorized tax software provider.
The new law also allows non-residents to register for these facilities, in a bid attract foreign investors and make it easier for them to do business in the Philippines.
Under the law, the tax authority is mandated to act on claims to refund taxes erroneously or illegally collected within 180 days. The threshold for mandatory issuance of receipts was raised to P500 pesos from P100, the law added.
The number of income tax return pages was also cut to two from four previously.
To speed up the process, the BIR must also craft a digitalization roadmap to ease tax compliance especially for micro and small taxpayers, the law stated.
The government wants to raise its tax effort, which is the share of tax collections to gross domestic product, to above 17 percent by 2028 from more than 14 percent currently, and sustain infrastructure spending at 5 percent to 6 percent of gross domestic product.
RA 11976 supports the administration’s eight -Point Socioeconomic Agenda through the collection of more taxes through digitization initiatives.
The PCO said the new law, which the President signed last Friday, will modernize and increase the efficiency and effectiveness of tax administration by strengthening taxpayer rights, allowing the government to capture as many taxpayers as possible into the tax net by streamlining the system and minimizing the burden on taxpayers, and increase the country’s revenue collection in the long run.
The new law also introduces administrative tax reforms and amendments to several sections of the National Internal Revenue Code of 1997, aims to update the Philippine taxation system, adopt the best practices, and replace antiquated procedures.
It also classifies taxpayers into micro, small, medium, and large; provide electronic or manual filing of returns and payment taxes either to the Bureau of Internal Revenue (BIR) or any authorized agent bank or authorized tax software provider; provide and option to pay internal revenue taxes removal to the City or Municipal Treasurer; eliminates the distinction between documentation and basis of sales of goods and services; and classifies value-added tax refund claims into low, medium, and high-risk.
Among the digitization initiatives to be carried out include adopting integrated and automated systems for facilitating basic tax services; setting up electronic and online systems for data and information exchange between offices and departments; streamlining of procedures by adopting automation and digitalization of BIR services; and building up BIR’s technology capabilities. (Reuters)
