‘Simplify tax payment’

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 Sen. Sonny Angara

Sen. Sonny Angara

Angara urges BIR; sees improved collection as a result

Prompted by a World Bank-PwC report that the Philippines lags even behind Cambodia and Myanmar in the ease of paying taxes, Sen. Sonny Angara urged the government to act quickly to simplify the tax payment system in the country for greater compliance and improved collection.

Angara, who is the Senate chairman of the ways and means committee, reiterated his point by citing the WB-PwC report titled “Paying Taxes 2015,” which shows that although the Philippines ranks above the Asia-Pacific average of 229 hours in tax compliance, with a system that takes a comparative 193 hours for Filipino taxpayers to comply, the country remains far behind Cambodia’s 173 hours and Myanmar 155 hours.

According to the report, Filipinos also need to make 36 payments to fully comply, compared with 32 payments in Vietnam, 31 in Myanmar, 27 in Brunei, 22 in Thailand, 13 in Malaysia, and five in Singapore.


“While we laud the efforts of the BIR (Bureau of Internal Revenue) to make taxation more transparent and efficient by implementing the electronic filing and payment system, it seems that many still find the new system more cumbersome and costly with the extra steps they have to take to file and pay their annual income tax. Add to that the glitches on the BIR website and the unfamiliarity of some BIR officials who are expected to assist the confused taxpayers,” Angara said.

“A simplified system, coupled with an updated and lowered tax rates would definitely increase compliance, widen the tax base and raise revenue collection. We must continue to push for these tax reforms to balance the needs of both the government and the citizens,” he added.

Having filed a bill that seeks to lower income tax rates, Angara has long been pushing for the simplification of the process of tax filing and payment by minimizing the steps, requirements, forms and fees imposed by the BIR.

Under the Anti-Red Tape Law, all government agencies are required to undertake ‘time and motion studies of transactions’ to reduce the processing time and bureaucratic red tape.

The lawmaker said he had requested the BIR for its time and motion studies to see how it plans to simplify and shorten the process.

“We have a one-size-fits-all type of tax system. Business tycoons who own multi-billion corporations have the same requirements as sari-sari store owners and sidewalk vendors who may not be computer literate. This should not be the case. Ang mga Pilipino naman ay handa at gustong sumunod sa batas at magbayad ng buwis pero pinapahirapan pa sila ng mahabang proseso at kumplikadong sistema, [The Filipinos, in fairness, are ready to comply with the law and pay their tax but are being made to go through a tedious and difficult process and a complicated system],” Angara said.

He urged the BIR to fix and upgrade its e-filing system to ensure its feasibility and make the already burdensome task of paying taxes easier and more convenient, especially for small entrepreneurs.

“It has been a problem of the government,” he said, referring to low revenue collections. “Tax collection has been wanting over the decades. What do we attribute this to? Some say it’s because of inefficient administration.”

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2 Comments

  1. While I agree to simplify tax the biggest problem is still the tax evasion of many rich people. Put them to prison if found guilty. It will be the best solution to deter the would be cheaters.

  2. Ricardo Harina on

    I agree with Senator Angara. Dapat One Page (1) Income Tax Return Only for Sari-sari Store owners with sales lower P100,000, Two-Pages (2) for Self-employed with sales higher than P100,000, Two-Pages Exempt Corporations and Four-Pages (4) for All Corporations.
    The problem I believe is that the present Income Tax Forms were mainly formulated by Lawyers with no help from reputable Accounting Firms to help them in simplifying the Forms. Can you imagine filling up 12 pages for Self-employed and 8 pages for Corporate returns were financial information can be found in the Audited Reports.