June 18, 2024

The Insider News

Direct from the source

Ease of Paying Taxes Law awaits House, Senate OK

HOUSE Ways and Means Chair Joey Sarte Salceda (Albay, 2nd district) says that the Ease of Paying Taxes Law will be ratified by the House and Senate today, and sent to President Marcos for enactment. The measure, which Salceda calls “the most pro-taxpayer reform in decades” will be approved by both Houses after the bicameral conference on the disagreeing provisions of their respective versions concluded earlier this morning.

“This will drag the tax system out of the past century and into the internet age. With EOPT, we now have a fully digital-ready tax system that caters to the global Filipino,” Salceda said.

The EOPT will allow taxpayers to file and pay their taxes anywhere, removes the registration fee requirement, and creates micro, small, and medium taxpayer services in the Bureau of Internal Revenue, on top of the existing Large Taxpayer Service.

Micro taxpayers are also not required to be withholding agents, to reduce their tax compliance burden.

The P3-million VAT exempt threshold for businesses will also be adjusted annually based on inflation, “because if we do not adjust that, more small businesses will have to pay VAT in the future.”

“Irritating” tax processes removed

Salceda says that “the most irritating and illogical parts of our tax system were also removed.”

Salceda pointed out, for example, that “the BIR currently requires an annual registration fee of P500 for all taxpayers. Imagine. You pay to pay taxes. That’s gone with EOPT.”

“The most annoying processes in the tax system, such as onsite transfer of registration, will now also be fully online. The authority to print receipts will also be free of charge.”

Provisions for OFWs

Salceda says that the EOPT also has provisions that will benefit Overseas Filipino Workers.

The proposal makes registration facilities available for taxpayers abroad, “a frequent lament because OFWs cannot register for TIN, a requirement for investing in stocks.”

“We also exempted OFWs from having to file tax returns if they earn income solely from abroad,” Salceda added.

Easier VAT refund claims

Salceda adds that the EOPT will make the VAT refund system easier, faster, and more efficient.

“It’s one of the most pressing issues in our tax system. Investors have suffered greatly as a result of our onerous VAT refund process,” Salceda said.

Under the EOPT, The VAT refund system will take into account high, low, and medium-risk refunds, to expedite the processing of claims that are not high-risk.

The EOPT also shifts the tax system from requiring both receipts and invoices, to just invoices for both goods and services “to accelerate the implementation of the electronic invoicing system,” Salceda explained.

“President Marcos’s most productive legislative session yet will bring out a modern PPP Code and a modern tax administration system all in one week. Modern laws under a modernizing President,” Salceda said.