Just days ago, there was a change of leadership in the Philippine government. We will certainly expect changes; and for us, taxpayers, new tax policies, programs, and rules are also anticipated. Some are excited, others are skeptic, few may be worried. But whatever emotions we have right now, we will not go wrong if we know how to comply with the rules and fulfil our obligations.
“Give to Caesar what is Caesar’s, and to God what is God’s.” Perhaps, this is a very familiar line to many of us, wherein, in the story, Jesus was asked by the Pharisees whether it is lawful to pay taxes to Caesar or not. Scholars commented, that this story commands people to respect the government authority and to pay the correct taxes it demands of them.
And true enough, as the government will not be able to function without the taxes paid to it, it is incumbent upon the taxpayers to pay the correct taxes due from them. Needless to say, funds are needed for infrastructure, education, and relief from crisis, among many others.
We might have heard the comment, “Why would we pay the correct taxes if others are not doing it?” Or perhaps, “If we pay taxes, the money will just be wasted or be put into the personal pockets of certain unscrupulous individuals.” While there may possibly be truth to these statements, but being affected by such negative thoughts would not help in anyway; as we, ourselves, have our own obligation. Paying the correct taxes is a duty that is legal, moral, and perhaps, even spiritual.
It has also been said, that the Philippines has numerous, and has, arguably, more complex tax laws than those of the other countries. Sometimes, we even hear foreigners react, that our tax laws are too stringent, difficult, and complicated. Well, unfortunately, there is no substitute, but for us to really gain ample knowledge about the Philippine tax laws.
Clearly, our compliance with tax rules must be sustained, particularly now, that we are continuously veering away from the traditional approach. As we have been experiencing, we are living in a tech savvy era. This was further heightened by the impact of the COVID-19 pandemic that restricted the movement of everyone, and which has consequently led the people to resort to the amplified use of technology to connect with one another and to do most of their work.
In our present era, the BIR is likewise continuing to go digital to cope with the changing times. For one, at the beginning of this year, the Calendar Year 2022 BIR Priority Programs and Projects included the Digital Economy Policy. Under this project, the BIR intends to align tax rules and regulations to capture the digital economy. Included also in the said priorities of the BIR were the re-architecture and development of the filing system/facility, and the enhancement of the quality of tax administration and the delivery of taxpayer services through a Taxpayer Registration Database Management System, among others.
Also, just last week, the BIR issued Revenue Regulations (RR) No. 08-2022, prescribing policies and guidelines on the use of the electronic invoicing/receipting system (EIS), wherein in this regulation, the ones mandated to issue EIS are: (a) taxpayers engaged in the export of goods and services; (b) taxpayers engaged in electronic commerce (e-commerce); and taxpayers under the Large Taxpayers Service.
RR No. 08-2022 directs certain taxpayers to comply with: (a) issuance of e-Receipts/e-Invoices to their customers/buyers, in lieu of manual receipts/invoices; (b) registration of their Computerized Accounting System (CAS) generating e-receipts/e-invoices and/or Cash Register Machines (CRM)/Point-of-Sales Systems and Certification of Sales Data Transmission System; and (c) transmission of the sales data covered by the e-receipts/e invoices using their Sales Data Transmission System into the EIS of the BIR.
Moving forward, some are anticipating that additional guidelines related to CAS may also be forthcoming. Others believe, that perhaps, the email platform will be the more frequent mode of communication and submission of applications with the BIR (e.g., filing of applications for BIR ruling, filing of replies/protest letters in tax assessments, or filing of tax refund applications). Moreover, the guidelines and extent of the use of electronic signatures might also be further expanded. These anticipated changes are mere surmises, and we will have to watch out for the issuances by the current BIR administration.
While we are in the present Digital Era and given the ever-evolving landscape of Philippine taxation, taxpayers must be able to adapt to change. We have to keep abreast of the tax developments, read and understand the issuances of the BIR and the decisions rendered by the courts on tax cases that are released from time to time, and attend tax trainings/seminars/webinars for tax updates; particularly now, that more changes are anticipated due to the passing of the tax administration to our new set of leaders.
Let's Talk Tax is a weekly newspaper column of P&A Grant Thornton that aims to keep the public informed of various developments in taxation. This article is not intended to be a substitute for competent professional advice.
As published in BusinessWorld, dated 05 July 2022