Bill on easier tax payments unclear — senator

A SENATE bill that seeks to ease the process of paying taxes should clarify the benefits for micro, small and medium enterprises (MSME), a senator said on Monday, noting that the measure’s objectives are too broad.

“We don’t have to reinvent the wheel,” Senator Aquilino Martin “Koko” D. Pimentel III told a ways and means committee hearing. “We just need to clarify things so as not to make it difficult for taxpayers.”

He also urged the Department of Finance (DoF) and Bureau of Internal Revenue (BIR) to establish a period for the proposed shift to a single invoice requirement for taxes from using official receipts to allow taxpayers to adjust.

Senate Bill 1346 filed by Senator Sherwin T. Gatchalian aims to “cater to the needs of taxpayers by achieving better service and tax administration.”

At the hearing, Mr. Gatchalian said the committee would work with DoF and BIR in clarifying how the bill can benefit these businesses.

He said the measure aims to create a special category for MSMEs to simplify their compliance with tax obligations. “We will improve the language.”

Mr. Gatchalian earlier said the measure, which is a priority of President Ferdinand R. Marcos, Jr., is expected to be approved by yearend. The House of Representatives passed a counterpart bill in September.

The measure aims to streamline and simplify tax collection by making tax requirements easier. It also proposes the filing of returns and payment of taxes through electronic channels or authorized agent banks.

Jason R. Payapag, assistant chief of BIR’s assessment division, proposed a shift to an accrual method of accounting from a cash-based accounting method for value-added tax (VAT) on sales of services, which he said would fast-track tax collection.

An accrual accounting method for taxpayers immediately records revenues and expenses as soon as they are incurred or earned, regardless of whether the money is received or paid, he said.

The country’s tax system uses a cash-based accounting method for VAT on sales of services, which only accounts for payments made. The cash-based method also does not recognize accounts receivable and payable. — John Victor D. Ordoñez