MANILA – Philippine President Ferdinand R. Marcos Jr. signed into law the Ease of Paying Taxes Act (now the Republic Act (RA) 11976) which aims towards the modernization and enhancement of the efficiency and effectiveness of tax administration, while simultaneously reinforcing taxpayer rights.
The Presidential Communications Office (PCO) has indicated that the newly enacted law was among the priority legislations highlighted in the President’s State of the Nation Address in both 2022 and 2023. This law brings forth administrative tax reforms and modifications to various sections of the National Internal Revenue Code of 1997. Additionally, it modernizes the Philippine taxation system, incorporates best practices, and replaces outdated procedures.
Among RA 11976’s salient features are:
- Classification of taxpayers into micro, small, medium, and large;
- Electronic or manual filing of returns and payment taxes either to the (Bureau of Internal Revenue) BIR, through any authorized agent bank or authorized tax software provider;
- Option to pay internal revenue taxes removal to the City or Municipal Treasurer;
- Elimination of the distinction between documentation and basis of sales of goods and services;
- Classification of value-added tax (VAT) refund claims into low, medium, and high-risk;
- Ensuring the availability of registration facilities to non-Philippine resident taxpayers;
- Promoting and assisting taxpayers in tax processes, streamlining; and
- Reducing documentary requirements and digitalizing BIR services through the development of the Ease of Paying Taxes and Digitalization Roadmap by the BIR.
The law also mandates a 180-day period to process claims for the refund of erroneously or unlawfully collected taxes. Moreover, it raises the mandatory issuance of receipts for the sale and transfer of goods and services from PHP100 to PHP500.
Additionally, the law directs the Bureau of Internal Revenue (BIR) to enhance its performance and efficiency through the adoption of an integrated digitalization strategy, offering end-to-end solutions to benefit taxpayers.
Some key digitalization initiatives include implementing an integrated and automated system for basic tax services, establishing electronic and online systems for data and information exchange across offices, streamlining procedures through automation and digitalization of BIR services, and enhancing the BIR’s technological capabilities, as outlined by the PCO.
The implementing rules and regulations of RA 11976 will be issued within 90 days of the Act’s effectivity after consultation between the Finance Secretary, the BIR, and the private sector.
You may read the law published through the Official Gazette here. It will become effective 15 days after its publication in the Official Gazette or a newspaper of general circulation.
Source: BusinessWorld Online