HOUSE Ways and Means Chair Joey Sarte Salceda (Albay, 2nd district) has thanked President Marcos for signing the Ease of Paying Taxes Act, or Republic Act No. 11976, into law this week. The signed law was made public in the Official Gazette today.
“I thank President Marcos for signing the Ease of Paying Taxes Act, the most comprehensive tax administration reform since the 1997 National Internal Revenue Code,” Salceda said.
The Ease of Paying Taxes Act introduces major improvements in tax administration, aimed at making the payment of taxes a more convenient experience for taxpayers.
“It brings our tax administration system to the digital world – allowing the BIR to shift to a full digitalization.”
“In that sense, and in keeping with other reforms PBBM has signed, such as the PPP Code, it makes President Marcos a modernizer of long-stagnating systems,” Salceda remarked.
EOPT “unburdens small taxpayers”
“The unifying theme of the EOPT,” Salceda said, “is to make tax compliance significantly easier for the smaller taxpayer, especially small businesses.”
“One key amendments is that we are introducing four classifications of taxpayers – micro, small, medium, and large — with easier requirements for the smaller taxpayer,” Salceda said.
The Ease of Paying Taxes also allows the filing of tax returns virtually everywhere. Tax returns can be filed, either electronically or manually, with any authorized agent bank, Revenue District Office through the Revenue Collection Officer, or authorized tax software provider.
The law also removes the VAT official receipt as a requirement for substantiating refund claims and input and output taxes. Instead, VAT invoice will be the sole supporting document required in declaring output taxes and claiming input taxes for both sale of goods and services. It is thus expected to eliminate the discrepancy between the gross sales declared in the Income Tax Return (ITR) and VAT returns, making VAT refund processing easier and faster.
Only medium and high-risk VAT refund claims will be subject to audit, while denial of VAT refund claims shall be explained by the Commissioner of Internal Revenue within the 90-day VAT refund claim window, and the taxpayer may appeal the decision within 30 days from receipt of the denial.
Taxpayers may also register anywhere with the BIR, and the P500 annual registration fee is abolished.
Micro and small taxpayers will also benefit from a significantly shortened ITR, which will no longer exceed 2 pages for these taxpayers.
OFWs who do not derive any income from the Philippines are also expressly exempted from filing an ITR.
Salceda said that he is “elated above all by the fact that the EOPT was born here in the House, and was crafted after the House Committee on Ways and Means’s discussions with various stakeholders. When we discuss anything in that Committee, it is truly in aid of modernizing legislation. This is a proud moment for the work our Committee does.”
Salceda also thanked counterparts in the Senate, “especially Chair Sherwin Gatchalian, and my colleagues in the bicameral conference committee.”
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