Press Release
September 27, 2023

AN INTRODUCING ADMINISTRATIVE TAX REFORMS, AMENDING SECTIONS 21, 22, 51, 56, 57, 58, 76, 77, 81, 90, 91, 103, 106, 108, 109, 110, 112, 113, 114, 115, 116, 117, 118, 119, 120, 128, 200, 204, 229, 235, 236, 237, 238, 241, 242, 243, 245, 248, AND 269; AND REPEALING SECTION 34 (K) OF THE NATIONAL INTERNAL REVENUE CODE OF 1997, AS AMENDED, AND FOR OTHER PURPOSES

September 27, 2023

Delivered by Hon. Win Gatchalian, Senator of the Republic:

Good afternoon, Mr. President.

Mr. President, distinguished colleagues, ladies, and gentlemen. As the chairperson of the Senate Committee on Ways and Means, and Chair of the Senate Panel, I have the honor to present the Bicameral Conference Committee Report on the Disagreeing Provisions of Senate Bill No. 2224 and House Bill No. 4125, on the "Ease of Paying Taxes Act."

The Senate and House panels have met today at the bicameral conference committee meeting and discussed to work out a reconciled version of our respective bills.

Mr. President, I would like to thank our fellow conferees from the House of Representatives led by Rep. Joey Sarte Salceda, chairperson of House Committee on Ways and Means and head of the HOR Panel, for agreeing to use the Senate version as the working draft of the reconciled bill. The reconciled version provides for taxpayer segmentation, file-and- pay anywhere mechanism, exemption of micro taxpayers from withholding taxes, reduction of penalties for micro and small taxpayers, and exemption of OFWs from the filing of income tax returns. The inclusion of these significant provisions is a testament to the bill's main objective of providing ease and convenience for our taxpayers.

With the aim of modernizing tax administration, removing antiquated procedures, and improving efficiency in tax compliance, this bill proposes to make the following additional revisions to our tax system:

1. Option to electronically or manually register, transfer, and cancel registration without the need to pay P500 annual registration fee;

2. Adoption of the accrual method for sale of goods and services for VAT purposes;

3. Recovery of output VAT paid on uncollected receivables;

4. VAT invoice as the only proof of transaction, and removal of the term "prominently" in the phrase "written or printed prominently" found in the current provision;

5. Automatic indexation of the VAT threshold;

6. Implementation of audit risk assessment in the processing of VAT claims;

7. Fixing the period for processing of refund of erroneously paid taxes to 180 days from the date of submission of complete documents; and

8. Increase of threshold from P100 to P500 for transactions requiring official receipts, to be adjusted every 3 years using the Consumer Price Index.

Mr. President, I would like to express my sincerest gratitude to our esteemed colleagues and members of the Senate panel, Sen. Sonny Angara, Sen. Mark A. Villar, Sen. Francis Tolentino, and our Minority Leader, Sen. Aquilino "Koko" Pimentel III, for their invaluable support to this measure.

The members of the House panel composed of Representative Joey Sarte Salceda, Rep. Rosanna "Ria" V. Vergara, Rep. Midy N. Cua, Rep. Gerville "Jinky Bitrics" R. Luistro, Rep. Ron P. Salo, Rep. Allan U. Ty, Rep. Kristine Singson-Meehan, and Rep. Sergio C. Dagooc are likewise authors of this bill.

Likewise, we thank the technical staff of the Committee of Ways and Means of the HOR and the Senate, my Committee on Ways and Means staff, and the Senate Tax Study and Research Office (STSRO) for their hard work until wee hours of the night burning the midnight oil.

Mr. President, the comprehensive details of the disagreeing provisions are reflected in the Joint Explanatory Statement. With the permission of the Body, I move that said Joint Explanatory Statement on the Disagreeing Provisions of Senate Bill No. 2224 and House Bill No. 4125 be read in toto into the Record, and that the Bicameral Conference Committee Report be ratified. Thank you very much and good afternoon.

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