Just days into a new year, President Marcos signed into law Republic Act 11976, the Ease of Paying Taxes Act. Perhaps the implementing rules and regulations of RA 11976 can be released before the mid-April deadline for the filing of income tax returns.
The public can only hope that the new law will be properly implemented to significantly ease the payment of taxes. It is often said that the country has too many laws and poor implementation. The government must show that this is not the case in the Ease of Paying Taxes Act – a priority measure of President Marcos in his efforts to boost revenues and attract more investments. Studies have also shown that many micro and small entrepreneurs, who account for the majority of businesses in this country, find paying taxes too complex. Malacañang said RA 11976 is meant to allow the government “to capture as many taxpayers as possible into the tax net.”
RA 11976 gives taxpayers the option to file tax returns electronically with the Bureau of Internal Revenue, any authorized agent bank or tax software provider. Non-residents can register for this. Income tax returns have been cut from four pages to just two. The threshold for the mandatory issuance of receipts has been raised from P100 to P500. Claims for tax refunds must be acted upon within 180 days.
Taxpayers will be classified into micro, small, medium and large. The BIR will craft a roadmap for digitalization to ease tax compliance particularly for micro and small taxpayers. Claims for value-added tax refunds will also be classified into low, medium and high-risk.
Authorities must ensure that RA 11976 will not go the way of efforts to cut red tape. The country has a law specifically targeting red tape, and another to promote ease of doing business. Yet entrepreneurs across the income spectrum continue to complain about massive amounts of red tape they encounter, both in national government agencies and in local government units including barangay offices. Unscrupulous people in government always find a way to go around the rules and impose hindrances to economic activities, with unnecessary and onerous fees collected at every step.
Compared with most other countries in the region, the Philippines has ranked low in ease of doing business, with the tax payment system among the complaints of investors. The government must ensure that this problem will be substantially reduced with the signing of the Ease of Paying Taxes Act.