Albay Rep. Joey Sarte Salceda is anticipating that the Ease of Paying Taxes (EOPT) Act will become a law within the next two months.
“I expect EOPT to become law this year; in fact, maybe in the next two months,” he said, adding that “the President wants a system that is easy for all, and he is open to new ideas on how to do it.”
The EOPT Law was identified as a priority measure by President Ferdinand Marcos Jr. in his second State of the Nation Address.
He said the EOPT Law is already being tackled in the Senate floor, citing “Senator Gatchalian and his colleagues will probably be done with their version next week.”
Salceda identified several key features of the reform, such as “First, it will allow for taxpayer classification/segmentation. There will be a small and medium taxpayer division. Small and medium taxpayers will be imposed fewer conditions, and that it would relax rules on returns filing and the payment of taxes.
“Third, we will shift to an accrual-based tax system with the invoice as the key documentation for VAT transactions, rather than a dual system with receipts for goods and invoices for services. That will result in faster VAT refunds and the full implementation of the electronic invoicing system, which I championed under TRAIN,” he noted.
“Fourth, we will ease compliance requirements. Under that, we will remove payment of annual registration fee, the requirement of audit prior to closure of a business establishment or retirement from practice of profession, and the requirement to secure an Authority to Print Receipts. We will also ease the penalty imposition on non-medium and non-large taxpayers (none for first offense, 50% for second, full rate for third),” he further stated.
“Finally, we will institute a risk-based audit policy for the BIR, so that the agency is not trigger-happy with issuing Letters of Authority,” he emphasized.
He commended Bureau of Internal Revenue Commissioner Romeo Lumagui Jr. for the agency’s fight against tax fraud, but adds that the BIR should pursue two other internal reforms.
“An equivalent of as much as 86% of current VAT collections are not collected because of VAT fraud, use of fake receipts, or leakages in tax exemptions.” he said.