Press Release
September 14, 2014

ANGARA TO BIR: SIMPLIFY TAX SYSTEM
TO ENCOURAGE PINOYS TO PAY TAXES

Senator Sonny Angara has urged the Bureau of Internal Revenue (BIR) to simplify the tax system to encourage more Filipinos, especially self-employed individuals, to pay their taxes.

"Currently, we have a one-size-fits-all type of tax system. Meaning, those business tycoons who own multi-billion corporations have the same requirements as small owners of sari-sari stores or sidewalk vendors. But in reality, these small entrepreneurs really can't afford to hire accountants and lawyers to do their financial statements," said Angara, chair of the Senate ways and means committee.

"Tapos marami pang kailangan i-fill up na mga form. Eh minsan, kapag hindi naintindihan ng ordinaryong tao 'yan, matatakot sila na baka makikilan pa sila. Dyan pwedeng magumpisa ang korapsyon, fixing at kotongan," he added.

During previous hearings on tax reform measures, the chair has emphasized the need to make the requirements simple particularly to the informal sector.

At present, BIR registration and documentary requirements include birth certificate, mayor's permit, Department of Trade and Industry certificate of business name, Professional Regulation Commission ID, and payment of professional tax receipt.

Taxpayers must also pay a registration fee of P500 annually, apply for invoices, and register their books of accounts.

A tax return should then be filed monthly for percentage tax, quarterly and annually for income tax, and monthly and quarterly for value added tax, even when there is no payment to be made.

"It's already proven that a complicated tax system does not work in our country. Marami ngang nagsasabi na gusto naman nila magbayad ng buwis pero pinapatagal at pinapahirapan pa sila. So dapat mas kaunti talaga ang forms at requirements," said Angara, who also authored a bill that aims to lower income tax rates in the country.

The senator suggested to BIR to impose just a one-time payment--a flat fee of P100 a year--to the national and local government for small entrepreneurs and informal economy workers in lieu of all taxes due in a year.

In fact, since his days in Congress, Angara has been pushing for the Magna Carta of Workers in Informal Economy (MACWIE) that seeks to exempt informal economy workers, business, enterprise or organization from all taxes, national or local.

Under Senate Bill 1941 or the MACWIE, informal economy workers include small farmers and fisherfolks, sari-sari store owners, sidewalk vendors, tricycle and jeepney drivers, domestic workers, among others.

The bill only requires a simple and standard system of accreditation with a one-time fee of not more than P50 for an individual worker and not less than P100 for business, enterprise and organization.

Moreover, the lawmaker noted that under the Anti-Red Tape Law, all government agencies are required to undertake time and motion studies of transactions to reduce processing time and bureaucratic red tape.

"We already requested from BIR their time and motion studies so we can look into how long it takes for a taxpayer to file, register and pay their taxes, and see how we can simplify and shorten the process," he said.

The BIR is currently running a public information campaign that shows the basic steps that a taxpayer should follow to comply with the right payment of taxes. The BIR's campaign carries the tagline, "I love the Philippines. I pay my taxes right. It's as easy as RFP," which stands for register, file and pay.

"The efforts of the BIR to inform the public is commendable but this might not be enough. What we need to do is to incentivize our taxpayers, especially the informal sector. We should make it easy for them to comply for us to be able to widen our tax base," Angara said.

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