Philippines enacts new law for easier tax payments

Easier taxation rolled out: Philippine President Ferdinand Marcos Jr has signed a bill that makes it easier for taxpayers to pay their taxes, his office said on Sunday.

The bill, signed into law, is a bid to increase the revenues the Phillipinean government needs for boosting infrastructure spending.

"The law will modernise and increase the efficiency and effectiveness of tax administration and strengthen taxpayer rights and allow the government to capture as many taxpayers as possible into the tax net," his office said in a statement.

The "Ease of Paying Taxes Act" simplifies procedures by allowing taxpayers to file tax returns electronically or manually with the Bureau of Internal Revenue (BIR).

The taxpayers can also approach any authorised agent bank or authorised tax software provider for the same.

The new law also allows non-residents to register for these facilities, for attracting foreign investors and simplify for them to do business in the Philippines.

The tax authority is mandated to act on claims to refund taxes erroneously or illegally collected within 180 days as per the law.

The threshold for mandatory issuance of receipts was raised to 500 pesos ($8.99) from 100 pesos, the law added.

The number of income tax return pages was also brought down to two from four previously.

To speed up the process, the BIR must also craft a digitalisation roadmap to ease tax compliance - especially for micro and small taxpayers, the law stated.

Marcos, who was elected president in June 2022, has outlined an ambitious plan for his six-year term in office that focuses on fiscal management and infrastructure upgrades.

His government wants to raise its tax effort, which is the share of tax collections to gross domestic product, to above 17 per cent by 2028 from more than 14 per cent currently, and sustain infrastructure spending at 5 per cent to 6 per cent of the gross domestic product.

(With Reuters Inputs)