People line up to file their income tax returns at the Bureau of Internal Revenue office in Intramuros, Manila, April 18, 2022. — PHILIPPINE STAR/ RUSSELL A. PALMA

THE Bureau of Internal Revenue (BIR) has released six sets of revenue regulations (RR) for the implementation of the Ease of Paying Taxes Act.

The regulations cover the new classifications of taxpayers, the simplified filing process for tax returns and payments, and amendments to penalty rates, among others.

In January, President Ferdinand R. Marcos, Jr. signed into law the measure that seeks to streamline the tax system.

The act amends sections of the National Internal Revenue Code of 1997 and introduces several tax reforms.

Under Revenue Regulations No. 3-2024, all references to “gross selling price,” “gross value in money” and “gross receipts” will now be referred to as “gross sales” regardless of whether they are issued for goods or services.

The term “invoice” will also now be used instead of “sales/commercial invoices” or “commercial receipts.”

The regulations also cover the output value-added tax (VAT) credit on uncollected receivables.

“A seller of goods or services may deduct the output VAT pertaining to uncollected receivables from its output VAT on the next quarter, after the lapse of the agreed upon period to pay: Provided that, the seller has fully paid the VAT on the transaction: Provided further, that the VAT component of the uncollected receivables has not been claimed as allowable deduction,” it said.

Revenue Regulations No. 4-2024 govern the filing of tax returns and tax payments, allowing electronic as well as manual transactions.

It also contains a section on the removal of civil penalties for wrong venue filing. “The civil penalty of 25% of the amount due in case of filing a return with an internal revenue officer other than those with whom the return is required to be filed, shall no longer be imposed.”

Revenue Regulations No. 5, the BIR outline a risk-based approach in verifying VAT refund claims.

VAT refund claims are now classified into low, medium and high risk. “Medium- and high-risk claims shall be subject to audit or other verification processes in accordance with the BIR’s national audit program for the relevant year or with the current policies and procedures applicable to the year of application of the VAT refund,” according to the RR.

The medium-risk category requires the verification of at least 50% of the amount of sales and 50% of total invoices/receipts issued including inward remittances and proof of VAT zero-rating.

Meanwhile, high-risk claims require 100% verification for both sales and purchases.

“Claims filed by first-time claimants shall be automatically considered as high risk and shall remain as such for the succeeding three VAT refund claims,” the BIR said.

“In case of full denial of a claim, the succeeding claim filed shall be classified as high risk. For medium-risk claims, verification shall be adjusted to 10% if the assigned Revenue Officer finds at least a 30% disallowance of the amount of VAT refund claimed.”

Meanwhile, Revenue Regulations No. 6 imposes reduced interest rates and penalties for micro and small taxpayers.

Revenue Regulations No. 7 also implements amendments on registration procedures and invoicing requirements.

Under the Ease of Paying Taxes act, the VAT official receipt is removed as a requirement for substantiating refund claims and input and output taxes, making the VAT invoice the sole supporting document required in declaring output taxes and claiming input taxes for both sale of goods and services.

Revenue Regulations No. 8 implements the new classification of taxpayers.

Under the regulations, a micro taxpayer refers to those whose gross sales for a taxable year are less than P3 million; small taxpayers are those with gross sales of between P3 million and less than P20 million; medium taxpayers are those with gross sales of between P20 million and less than P1 billion; large taxpayer are those with gross sales are P1 billion and above.

Taxpayers are expected to file their annual tax returns on April 15 (Monday). This year, the BIR is expected to generate P3.055 trillion in revenue.

The BIR collects about 70% of the government’s revenue. — Luisa Maria Jacinta C. Jocson