Paying our dues

If the Tax Reform for Acceleration and Inclusion (Train) bill gets signed into law before the year ends, this will be the biggest legislation that will impact every Filipino in three decades.

President Duterte may be infamous for his war against drugs, but he will definitely win the hearts of 42.7 million hardworking Filipinos in the labor force who are unjustly and overly burdened by the outdated income tax system.

And whether the tax policy reform will increase commodity prices or not, I’d say, we’ve got to trust the government to implement mitigating measures like the unconditional cash transfer, at least for the 10 million poorest households.

As a tax advocate, I wish nothing but to see a genuine tax reform that will gradually transform our corrupt tax system to a simple, just and equitable one where we can truly uphold integrity and honesty in paying our dues.

After 20 years, a comprehensive tax reform is finally on its way, starting with package one which is now being deliberated in the bicameral committee. This will exempt at least 82 percent of our individual taxpayers earning an annual income of P250,000 or less.

Further, the Train bill aims to broaden the VAT base and increase excise taxes on petroleum products, automobiles, mineral products (coal and coke), sweetened beverages and other nonessential goods and services i.e., cosmetic procedures.

The proposed increase in excise taxes is said, however, to result in an increase in commodity prices and transportation and distribution costs.

But the Department of Finance (DOF) is firm in its position that the target increase in revenue collections will benefit everyone through the “Build, Build, Build” program of the Duterte administration along with its investments in education, health, social protection, employment and housing that prioritize and directly benefit both the poor and near-poor households.

Aside from lowering the personal income tax, self-employed individuals and professionals are expected to benefit from the optional flat tax at 8 percent and annual or quarterly filing of tax returns in lieu of the bimonthly tax filing under the current tax system.

Also, the 12-page income tax return (ITR) for individuals and the 8-page ITR for corporation will be slashed to two pages.

It’s true that we need an overhaul in our tax system, especially in the Bureau of Internal Revenue (BIR) and the Bureau of Customs (BOC).

But this cannot be done overnight and by the government alone.

As former Finance Secretary Jesus Estanislao always says, “governance is a shared responsibility.”

The saga (for a genuine tax reform) continues as we finalize package one of the Train bill.

Despite the pending approval of package one, the DOF started inviting various stakeholders, including tax advocates like us, to a preliminary discussion on package two which aims to lower corporate income tax, among others.

Internal Revenue Commissioner Caesar Dulay continues to exhibit good and honest leadership as he implements his top three priority programs: (1) attain the 2017 collection goal of P1.829 trillion; (2) improve taxpayer satisfaction; and (3) protect revenues and regain public trust.

Of the P1.829 trillion goal, BIR collected P1.449 trillion in the last 10 months.

Commissioner Dulay gave credit to the taxpayers for their contributions to the BIR’s collections.

As BIR aims to collect its target revenue to fund government services, he appeals to the taxpaying public to help by paying the right taxes correctly and on time, and not line the pocket of some corrupt BIR personnel.

Per RMC 60-2017, taxpayers are given the option to subscribe to the Seal of Honesty (SOH) Certification Program to help them improve their voluntary compliance as partners in nation building upon full satisfaction of the qualification criteria as a basis for entitlement of the benefits, i.e., issuance of annual tax clearance, last priority audit and other privileges which DTI and other government agencies may extend to certified SOH taxpayer.

For more information on the Seal of Honesty (SOH) Certification Program, email us at [email protected] or call (+63) 622 7720.