Albay Rep. Joey Sarte Salceda, an economist, has asked the Bureau of Internal Revenue (BIR) to create a Medium Taxpayer Service and a Digital Taxpayer Service in connection with ongoing efforts to tax foreign vendors of digital services.
Salceda, chairman of the powerful Committee on Ways and Means, made the request during the panel’s hearing on the issue.
“Please relay my request to Commissioner (Caesar) Dulay that the BIR create a Medium Taxpayer Service for enterprises that are not large enough for the Large Taxpayer Services, but who comprise a substantial amount of business taxes. I also hope to have a Digital Taxpayer Service to complement our efforts to impose VAT and other taxes on digital service providers,” Salceda told BIR officials who attended the hearing.
Salceda noted that the Singaporean tax authorities have a “vendor registration system” for digital taxpayers that also acts as a specialized tax service for them.
“The main appeal of digital services is that they are easier and faster. The tax collection on these services also has to be fast and easy. That is why a specialized tax service for them might be in order.”
Salceda also requested the BIR to fully digitalize tax processes for small taxpayers, including overseas workers.
Earlier last year, the House tax chair requested the BIR to digitalize the process for applying for a TIN (tax identification number) so that OFWs (overseas Filipino workers) can invest in the Philippines even as they are abroad.
Salceda explained that “ due to the requirement that taxpayer information be verified by personal appearance in the Revenue District Offices (RDOs), OFWs who are still abroad are unable to open stock brokerage accounts without their TINs—and because getting a TIN requires personal appearance, they are practically locked out of the market.”
While the BIR has already allowed OFW applications by email with an authorized proxy processing papers in the country, Salceda said he wanted a fully digitalized system where personal appearance requirement is waived.
“It’s not like you’re trying to cheat on your taxes. You are even registering yourself for inclusion among the people the BIR will chase after. So, registering for a TIN should be made a fully digital matter. The SEC (Securities and Exchange Commission) has already allowed fully digital incorporation. It is now much easier in this country to be a corporation than to be a registered taxpayer,” Salceda said.
Salceda also requested the BIR to “end the inefficient practice of charging an annual registration fee of P500 for taxpayers.”
“That, and the need to change your revenue district office every time you work for a different employer. That is obnoxious. I request the BIR to find an administrative way to end it, as the Ease of Paying Taxes Act, which I principally authored, has not made progress in the Senate.”