By Rea Cu @ReaCuBM
The proposal of the Department of Finance (DOF) to connect all cash registers and point-of-sale (POS) machines of businesses to the Bureau of Internal Revenue (BIR) and to allow the use of electronic receipts will improve the government’s tax-collection efficiency, according to the National Tax Research Center (NTRC).
The DOF has incorporated these proposals in the Comprehensive Tax Reform Program (CTRP) that it submitted to Congress.
NTRC Executive Director Trinidad Rodriguez said the use of digital technology will facilitate real-time collection and assessment of taxpayers’ data by the BIR, which will improve its revenue-collection efficiency.
“The NTRC fully supports the proposed electronic interconnectivity of businesses’ cash registers and point-of-sale machines to the BIR system for simultaneous recording and transmittal of tax data,” Rodriguez said in a recent hearing on the CTRP at the House of Representatives.
Aside from the NTRC, the Philippine Institute of Certified Public Accountants (Picpa) and the Management Association of the Philippines also backed the proposed tax-administration reforms using digital technology.
“In so far as the POS interconnection and centralized system in the BIR is concerned, we’re fully supportive of that and also for some other specifications, because we believe that it can eventually reduce the cost of administration and even simplify the examination of the BIR,” said Alex Cabrera, who represented both MAP and Picpa at the House hearing.
Tax-administration measures included in House Bill (HB) 4774 include the use of digital technology to improve tax administration by the BIR and the Bureau of Customs (BOC); the fuel marking and monitoring of petroleum products; and the relaxation of bank-secrecy laws for tax-fraud cases, among others.
During the hearing, Finance Undersecretary Karl Kendrick T. Chua said shifting to the digital platform will tighten tax administration and help government collect the correct amount of revenues from private businesses.
“In principle, we support many of the provisions [of HB 4774]. We think that tightening the tax administration by mandating the use of fuel marking, relaxing the bank secrecy for fraud and criminal cases, enhancing tax administration via e-receipts interconnectivity and data sharing will all enhance administration of tax revenues,” Chua said.
Earlier, Finance Secretary Carlos G. Dominguez III has welcomed the move by the House Committee on Ways and Means to approve in principle the first package of the CTRP before the Lenten break of Congress, adding the decision of the committee to pass tax reforms as a package rather than on a piecemeal basis is a step closer for Congress to help the Duterte administration fund its infrastructure projects.
“Not all industries…will find the POS machine interconnection cost effective. This, I think, is more effective on the retail level…this is something that we need to study. The BIR has already been trying to look into these issues,” he added.
Last week the House Ways and Means panel voted to approve in principle the CTRP as a package, subject to the creation of a technical working group that would draw up a substitute bill consolidating the proposed reforms by the DOF with other tax-related proposals.
HB 4774 seeks to make the tax system simpler and more progressive through the lowering of personal income-tax rates; expanding the value-added tax base but retaining exemptions for seniors and persons with disabilities; and adjusting the excise taxes on oil and automobiles.
Complementary reforms being considered by Congress to HB 4774 include introducing a beverage tax; indexing the motor vehicle user’s charge to inflation; and granting an amnesty to past estate-tax cases.
Meanwhile, over the weekend, Vice President Maria Leonor G. Robredo encouraged her constituents in Naga City and Camarines Sur to be actively involved in the shaping of the CTRP legislation, saying the reform is one of the crucial and urgent measures that need to be passed.
“It’s important for us to have this discussion, especially among this mix of business groups and civil society. I believe that it is essential for the people to better understand the tax-reform package because once we do, it will be easier to give 100 hundred percent support both for the passage of the bill and its implementation. Rest assured you can depend on our support,” Robredo said.
The Action for Economic Reforms and other advocates have also urged the Duterte administration to impose higher uniform tax rates on tobacco and alcohol excise taxes, which have shown to be most effective in generating substantial revenue, and discouraging smoking and excessive drinking among Filipinos.
“We welcome this effort from the Vice President to open the discussion in Naga on this very important reform that will help the Duterte administration fund its ambitious agenda to sustain the high-growth momentum, dramatically cut poverty and transform the country into a high middle-income economy by 2022,” Finance Assistant Secretary Ma. Teresa S. Habitan said.