President Ferdinand Marcos Jr. has signed into law Republic Act (RA) 11976 or the Ease of Paying Taxes Act, which aims to modernize and increase the efficiency and effectiveness of tax administration and strengthen taxpayer rights.
In a statement on Sunday, the Presidential Communications Office (PCO) said the Ease of Paying Taxes Act was one of the priority laws mentioned during the State of the Nation Address in 2022 and 2023.
“The law allows 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 PCO said.
The new law, signed on Friday, introduces administrative tax reforms and amendments to several sections of the National Internal Revenue Code of 1997. It also updates the Philippine taxation system, adopts best practices, and replaces antiquated procedures. Among RA 11976’s salient features are classification of taxpayers into micro, small, medium, and large; electronic or manual filing of returns and payment taxes either to the Bureau of Internal Revenue (BIR), through any authorized agent bank or authorized tax software provider; option to pay internal revenue taxes removal to the City or Municipal Treasurer; elimination of the distinction between documentation and basis of sales of goods and services; andclassification of value-added tax (VAT) refund claims into low, medium, and high-risk.
The law ensures the 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.
The law also imposes 180 days to act on claims for refund of erroneous or illegal tax collection and increases the amount for the mandatory issuance of receipts for each sale and transfer of goods and services from P100 to P500.
According to PCO, the law mandates the BIR to adopt an integrated digitalization strategy by providing end-to-end solutions for the benefit of taxpayers.
These include adopting integrated and automated systems for facilitating basic tax services, setting up electronic and online systems for data and information exchange between offices and departments, streamlining procedures by adopting automation and digitalization of BIR services, and building up BIR’s technology capabilities.
RA 11976’s implementing rules and regulations will be promulgated 90 days from the effectivity of the act after the consultation of the Finance secretary with the BIR and the private sector.
The law will take effect 15 days after its publication in the Official Gazette or a newspaper of general circulation.
Albay Rep. Joey Sarte Salceda thanked the President for signing the bill into law.
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, Salceda said.
“It brings our tax administration system to the digital world – allowing the BIR to shift to a full digitalization,” Salceda said.
“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,” he added.
Salceda said the unifying theme of the law “is to make tax compliance significantly easier for the smaller taxpayer, especially small businesses.” —
