Senator Sonny Angara has called on the Bureau of Internal Revenue (BIR) to make it easier for Filipinos, especially for small taxpayers, to pay their taxes correctly.
“Matagal na nating panawagan, kasabay ng pagbaba ng buwis, na gawing simple ang forms and procedures ng pagbabayad ng buwis. The BIR should always be ready, equipped and accommodating in offering assistance to both large and small taxpayers so they can properly comply with our tax process,” said Angara, chairman of the Senate ways and means committee.
The BIR has moved the deadline for filing income tax returns (ITR) to April 17 from April 15, which falls on a Black Saturday. Late filing would incur a 20-percent interest per annum penalty, and a 25-percent surcharge on the tax due.
Angara urged taxpayers to avoid the rush on the 17th so they have ample time to rectify incorrect ITRs within the deadline to avoid penalties.
He cited a report by the World Bank and PwC called “Paying Taxes 2017” which placed the Philippines 115th of 180 countries in a global ranking of ease of tax compliance for businesses. In the 2016 study, the Philippines was 126th out of 189 countries, climbing 11 spots this year.
The study showed that it takes an average of 186 hours or nearly eight days for Philippine medium-sized companies to comply with their respective tax obligations–an improvement from the 193 hours recorded last year, and is faster than the Asia Pacific average of 212 hours.
The study further showed that Philippine companies need to make 28 payments to fully comply–an improvement from 36 payments last year, but still more than the Asia Pacific average of 23.5 payments.
The top countries in the region are Hong Kong (3rd globally) which only requires three payments in 74 hours to pay taxes, and Singapore (8th globally) which requires five payments in 67 hours.
To help address the difficulties faced by Filipinos in paying taxes, Angara has filed Senate Bill 132 that seeks to establish a Taxpayer Assistance Service within the BIR to answer queries and guide taxpayers on how to efficiently deal with their tax-related problems and concerns.
“Tax collection would increase if we improve tax compliance. Tax compliance would improve if we reduce the tax rates, and lessen the complexity and intricacy of our tax code,” the senator said.
The BIR sets its collection target this year at P1.83 trillion to fund the administration’s massive infrastructure projects. Last year, the agency collected P1.57 trillion, performing 97 percent against its P1.62-trillion target.
According to a recent BIR data on personal income tax compliance rates, only 41 percent of professionals and 30 percent of self-employed pay their taxes, as compared to the 99-percent compliance rate of salaried workers given that their taxes are automatically withheld from their paycheck.
“We should encourage Filipinos contribute in building the country through their taxes. Instead of making tax payment cumbersome, we must provide taxpayers with free and accessible professional assistance. The Taxpayer Assistance Service would render the first layer of services that every Filipino taxpayer needs and deserves,” Angara said.
Under the proposed measure, the Taxpayer Assistance Service is mandated to prepare, publicize and circulate policies, programs, standards, guidelines and procedures relative to public information and education programs on taxation.
He has also filed Senate Bill 308 that will put in place a charter on taxpayer rights, and create a National Taxpayer Advocate Office that will protect taxpayers against harassment and corrupt practices of some officers and employees of the BIR.
“These measures aim to reduce bureaucratic red tape, and to safeguard the rights of taxpayers who are entrusting a significant share of their hard-earned money to the hands of the government. In return, it is our hope that all taxpayers will be more truthful and timely in the filing and payment of tax dues,” the lawmaker said.