The newly signed Ease of Paying Taxes Act will modernize Philippine tax administration and strengthen taxpayer rights, the Department of Finance (DOF) said yesterday.
In a statement , DOF Benjamin Diokno welcomed the passage of the Ease of Paying Taxes (EOPT) Act, which was signed into law as Republic Act No. (RA) 11976 by the President last January 5.
“We are off to a good start this 2024. By making the tax system more taxpayer-friendly through simplified tax filings and protecting taxpayers’ rights, we will achieve our goal of encouraging and improving tax compliance,” Diokno said.
RA 11976 is seen encourage more taxpayers to enter into and comply with the tax system by streamlining processes and minimizing the burden on taxpayers, thereby increasing the country’s revenue collection.
The President, however, vetoed Section 8 of the Act which exempts micro taxpayers from withholding creditable income tax citing possible understatement of tax obligations that would impact on the government’s cash flows.
Creditable withholding taxes serve as advance payment of tax obligations and an audit trail for compliance.
The law’s implementing rules and regulations shall be promulgated 90 days from the effectivity of the Act, after consultations between the DOF, the Bureau of Internal Revenue (BIR) and the private sector.
RA No. 11976 takes effect 15 days after its publication in the Official Gazette or a newspaper of general circulation.
The new law will classify taxpayers into micro, small, medium and large according to their gross sales to form a tax system that is responsive and specific to each segment’s needs.
Filing of returns and payment of internal revenue taxes will also be made easier through electronic or manual means such as authorized agent banks or authorized software providers.
The law ensures the availability of registration facilities to taxpayers not residing in the country.
The law also harmonizes the rules on the value-added tax treatment of sales of goods and services, thereby requiring sales invoice for both.
The mandatory issuance of receipts for each sale and transfer of goods and services will be increased from P100 to P500.
The Act now also provides a 180-day period for the BIR to process general refund claims on erroneous or illegally collected taxes.
The Ease of Paying Taxes and Digitalization Roadmap will be developed by the BIR to promote and assist taxpayers by streamlining tax processes, reducing documentary requirements and digitalizing its services.
