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Bills on Ease of Paying Taxes: Creation of small taxpayer group, different e-payments proposed

PHILIPPINE STAR/ RUSSELL PALMA

THE SENATE Ways and Means Committee on Wednesday deliberated on proposals to ease the payment of taxes, including the creation of new classifications for small taxpayers and adopting different online payment platforms.

“The measures aim to simplify the lives of our taxpayers, make it convenient, and enable them to use cutting-edge technologies as means of paying taxes,” Senator Sherwin T. Gatchalian, who chairs the committee, said during the hearing, referring to Senate Bill 1346 and House Bill 4125.

He said the passage of an Ease of Paying Taxes law “will encourage more businesses to register, people to register… hopefully broaden the tax base and… increase revenue collection to make it more efficient for all of us,” he added.

Tax Management Association of the Philippines, Inc. (TMAP) President Fulvio D. Dawilan said adding a separate category for small taxpayers who will be subjected to less documentary and procedural requirements would stimulate compliance.

“I think we can add, other than medium and large, we can add another layer, the smallest taxpayers and the reason is really to simplify their compliance requirement,” he said during the hearing.

“Maybe one payment, one filing for a year will do rather than the current practice where everybody files for monthly, quarterly and annually,” he said.

Mr. Gatchalian noted that under the current system, the Bureau of Internal Revenue (BIR) does not have a definition for small or micro taxpayers.

Large taxpayers are those with annual gross sales/receipts of at least P1 billion. Medium taxpayers are those within the top 500 taxpayers of a region or district but have not been officially notified by BIR and cannot avail of the bureau’s Large Taxpayers Service.

BIR Assistant Commissioner for Assessment Service Ma. Luisa I. Belen, however, took a position of keeping the status quo.

“For now, I think it would be proper that we just classify it as large and medium because all the rest will follow as being a small because the tax due is either VAT (value-added tax) or percentage, so all the rest that will be below the threshold of the VAT will be paying the percentage taxes.”

Any person or entity who sells, barters, exchanges, leases goods or properties and renders services subject to VAT must pay and file a return if the aggregate amount of actual gross sales or receipts exceed P3 million.

INHERITANCE TAXAnother BIR official, Assistant Commissioner for Legal Service Larry M. Barcelo,  also pushed for maintaining the current system of payments for estate and donors taxes, saying that the transfer of properties through inheritance or donation sometimes involve more than one property.

“In order to ensure that all properties are properly accounted for, valuated and consolidated in one return, the BIR believes that the venue restrictions should be retained,” he said.

Deloitte Philippines Managing Partner and Chief Executive Officer Fredieric B. Landicho, on the other hand, said the bills’ provisions “allowing taxes to be paid even remotely” should be retained.

Mr. Landicho said their company, an audit and financial advisory firm, has handled foreign workers who often found the tax processes in the Philippines a “hassle.”

The proposed law for a more efficient tax administration, he added, would contribute to the ease of doing business, which will ultimately attract more foreign investments into the country.

The BIR also opposed the removal of the P500 fee for the registration of new businesses and its yearly renewal, noting that this will downsize the agency’s income.

Mr. Barcelo said abolishing this fee may lead to “adverse effects to the expenditures of the bureau.”

The BIR also wants to retain the existing pay-as-you-file system.

“In separating the acts of filing and payment, this will increase the chances of taxpayers in filing but not paying the taxes,” he said. — Alyssa Nicole O. Tan

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