PRESIDENT Ferdinand R. Marcos Jr. signed into law on Friday Republic Act No. 11976, also known as “Ease of Paying Taxes Act,” seen to significantly contribute to achieving the administration’s 8-Point Socioeconomic Agenda through much improved revenue collection through digitalization initiatives.
Mentioned as a priority legislation during the President’s State of the Nation Address in 2022 and 2023, the newly signed EOPT law supports the administration’s 8-Point Socioeconomic Agenda through the collection of more taxes to enhance economic and social development.
The law will modernize and increase the efficiency and effectiveness of tax administration and strengthen taxpayer rights and allow the government to capture as many taxpayers as possible into the tax net by streamlining the system and minimizing the burden on taxpayers, increasing the country’s revenue collection in the long run.
The new law, introduces administrative tax reforms and amendments to several sections of the National Internal Revenue Code of 1997, also eyes to update the Philippine taxation system, adopt best practices, and replace antiquated procedures.
Among the law’s salient features include classification of taxpayers into micro, small, medium, and large; electronic or manual filing of returns and payment taxes either to the BIR, through any authorized agent bank or authorized tax software provider; option to pay internal revenue taxes removal to the City or Municipal Treasurer; and elimination of the distinction between documentation and basis of sales of goods and services; and classification of value-added tax (VAT) refund claims into low, medium, and high-risk.
It also features ensuring availability of registration facilities to non-Philippine resident taxpayers; promoting and assisting taxpayers in tax processes, streamlining; reducing documentary requirements, and digitalizing BIR services, through the development of the Ease of Paying Taxes and Digitalization Roadmap by the BIR.
At the same time, RA No. 11976 imposes 180 days to act on claims for refund of erroneous or illegal tax collection; increases the amount from one hundred pesos (P100) for the mandatory issuance of receipts for each sale and transfer of goods and services to five hundred pesos (P500); and reducing the number of income tax return (ITR) pages from four to two pages.
The law introduced amendments to Sections 21, 22, 51, 56, 57, 58, 76, 77, 81, 90, 91, 103, 106, 108, 109, 110, 112, 113, 114, 115, 116, 117, 118, 119, 120, 128, 200, 204, 229, 235, 236, 237, 238, 241, 242, 243, 245, 248, and 269, as well as repealed Section 34(K) of the National Internal Revenue Code of 1997.
It also mandates that in order to improve the performance and efficiency of the Bureau of Internal Revenue (BIR), the agency must adopt an integrated digitalization strategy by providing end-to-end solutions for the benefit of taxpayers.
Among the digitalization initiatives that should be carried out include adopting integrated and automated system for facilitating basic tax services, setting up electronic and online system for data and information exchange between offices and departments, streamlining of procedures by adopting automation and digitalization of BIR services, and building up BIR’s technology capabilities.
The law’s implementing rules and regulations (IRR) shall be promulgated 90 days from the effectivity of the Act after the consultation of the Finance Secretary with the BIR, and the private sector.
RA No. 11976 takes effect 15 days after its publication in the Official Gazette or in a newspaper of general circulation.
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