BIR urged to simplify tax system

MANILA, Philippines - The Bureau of Internal Revenue (BIR) was urged yesterday to simplify the tax system to encourage more Filipinos, especially the self-employed to pay taxes.

Sen. Juan Edgardo Angara has proposed that the BIR  impose a one-time payment – a flat fee of P100 a year – on small entrepreneurs and informal economy workers in lieu of all taxes due in a year.

“Currently, we have a one-size-fits-all type of tax system,” he said.

“Meaning, those business tycoons who own multi-billion corporations have the same requirements as small owners of sari-sari stores or sidewalk vendors.” 

The Senate ways and means committee chairman said small entrepreneurs can’t afford to hire accountants and lawyers to do their financial statements.

“It’s already proven that a complicated tax system does not work in our country,” he said.

“Many are saying that they want to pay taxes, but the process is being lengthened and that they are given a tough time. So the number of forms and other requirements must be lessened.”

BIR registration and documentary requirements include a birth certificate, mayor’s permit, Department of Trade and Industry certificate of business name, Professional Regulation Commission ID, and professional tax receipt.

Taxpayers must also pay a registration fee of P500 annually, apply for invoices, and register their books of accounts.

A tax return must then be filed monthly for percentage tax, quarterly and annually for income tax, and monthly and quarterly for value-added tax, even when there is no payment to be made.

Angara has authored a bill seeking to lower income tax rates.