The next administration must push for a simplified taxation system that will make compliance across all taxpayer classes much easier, said Marivic Espano, chairperson and chief executive officer at Punongbayan & Araullo (Grant Thornton), on Tuesday.
Speaking at the sidelines of The Manila Times 3rd Business Forum, Espano said the present system was “too convoluted” such that its interpretation was difficult for both domestic and foreign businesses.
“Our present tax system is too convoluted … it is susceptible of many interpretations,” she said, adding that “as to when and how to interpret … is left to the discretion of the taxing authority, which in turn, changes from time to time.”
Simplification, Escano said, will allow businessmen to focus on growing their respective enterprises instead of worrying about the tax implications of every transaction they enter into.
“Most investors and businessmen are willing to comply with their respective tax liabilities, but the problem is with the present system, interpretation of tax laws changes from time to time. We need it to be much stable,” she said.
“Investors do not want the rules to change in the middle of the game. For example, the PEACE bonds, it was introduced to investors to be exempt from interest earnings tax. That was why several investors availed of this bond float program. Then when it fell due and demandable, the tax authority says it is not exempt,” Escano noted
“[T]axation rules must be simplified so that there is no more room for many interpretations. That way, it will not change every time the new administration comes in, since the President is entitled to appoint its tax administrator each time,” she said.
As published in The Manila Times dated 01 March 2016 by Katrina Mennen A. Valdez