Atty. Ian Dato on the Ease of Doing Business Act

Today we are doing an interview with Atty. Ian Dato, a legal expert, who has agreed to give his insight to navigating the Philippine business landscape.

He has been practicing law for 20 years and owns successful enterprises. Atty. Dato is a former undersecretary with the government, holds a graduate degree, is a Chevening scholar, and sits on the boards of publicly listed companies. He is a partner at the law office of Campos Canobas Sy Selva Ligon Dato and may be contacted at [email protected].

Q: What is the Ease of Doing Business Act?

A: Republic Act No. 11032 or the Ease of Doing Business and Efficient Government Service Delivery Act of 2018. It addresses issues about the labyrinthine processes to do transactions with government and aims to address complaints about getting things done with the government.

Q: In what way does this law improve transacting with the government?

A: It streamlines and expedites business and nonbusiness related transactions in government. It mandates the automation of the business permitting and licensing system of local governments (LGU) to achieve efficient turnaround and prevent graft and corruption with the hope of doing away with “fixers”.

Simplified requirements and procedures will take out any partisan considerations in the decision-making process, as what happened in the case of the former Mayor of Masantol, Pampanga (Lacap v. Sandiganbayan, G.R. No. 198162) who was found guilty for having neglected or refused to act on the application for Mayor’s Permit despite complete documentary requirements supporting the same.

Q: What are the covered entities?

A: According to Sec. 3, the Act applies to all government offices and agencies, including LGUs (local government units), government-owned and-controlled corporations and other government instrumentalities, whether located in the Philippines or abroad.

Q: Can I register my business in the Philippines online?

A: Yes, through the Central Business Portal which can receive applications and data involving business-related transactions, including primary and secondary licenses, and business clearances, permits, certifications or authorizations issued by the LGUs. It may also provide links to the online registration or application systems established by the national government agencies.

Q: What permits and licenses do I need to operate my business?

A: Government agencies must clearly define the necessary permits and licenses for each type of business activity. Before you operate any business, you must register it with SEC (Securities and Exchange Commission) or DTI (Department of Trade and Industry), BIR (Bureau of Internal Revenue), the local government unit where you operate, SSS (Social Security System), Philhealth, and Pag-IBIG Fund.

Q: Do I still have to separately apply for all necessary permits and licenses from the different departments of the LGU?

A: The law mandates a single or unified business application form that will be made available online and consolidates all information of the applicant by various local government departments, such as local taxes and clearances, building clearance, sanitary permit, zoning clearance, fire clearance and other LGU requirements.

The Act also requires the establishment of business one-stop shops to create a single location, or website, for all business permit licensing needs, making it easier and more convenient for business owners.

Q: How long does it take to process permits and licenses?

A: There are strict timelines for processing permits and licenses based on the agencies’ Citizen’s Charter.

Simple transactions shall be acted upon within three working days, complex transactions within seven working days, and transactions involving activities which pose danger to public health, safety, morals, public policy, highly technical applications, within 20 working days or as determined by the government agency concerned, whichever is shorter, and those requiring approval of the local Sanggunian within 45 working days.

The prescribed processing times may be extended only once for the same number of days, except for Sanggunian extensions which shall be 20 working days.

Q: What happens to my application or request when the prescribed timeframe lapses?

A: Sec. 10 provides that failure of the government officer or employee to act upon the application within the prescribed processing time shall result in the automatic approval of such application, provided that all requirements have been submitted and fees have been paid.

Q: In your experience, how are government offices and agencies faring under this Act?

A: The results vary. The SEC may take seven days to register corporations through its eSPARC, with exceptions.

The Food and Drug Administration is able to act on applications for CPR on low-risk food products in less than 20 days from the payment of fees but the high-risk ones take longer.

The Saggunian Panlalawigan of Northern Samar has a 90-percent accomplishment rate on requests while there is struggle in 5th and 6th class municipalities. Some municipalities have also tied up with Landbank for the payment of business taxes and real property taxes through Link.BizPortal.

Q: Can a government officer or employee deny my application without explanation?

A: No. The Act requires that a denial of an application must be formally communicated to the applicant in writing explaining the grounds for the denial and identify the officer making the denial.

Q: Can a government officer or employee refuse to render service during lunch breaks?

A: No. Applicants who are within the premises prior to the end of official working hours must be attended to, even during lunch break and after working hours.

Q: I was only given an electronic copy of my permit or license, is that sufficient?

A: Yes. Electronic versions of licenses, clearances, permits, certifications, or authorizations shall be equivalent to the physical copy.

Q: What are the tax obligations for my business?

A: While the Act primarily focuses on streamlining regulatory processes, it indirectly influences tax compliance by improving overall business efficiency.

By reducing red tape, businesses can allocate more resources toward understanding and fulfilling their tax obligations, promoting better compliance with tax laws.

Q: How can I navigate government bureaucracy efficiently?

A: The Act encourages the establishment of one-stop shops and online platforms to facilitate seamless interactions between the applicant and government agencies.

These initiatives aim to simplify bureaucratic procedures, provide clear guidance, and minimize the complexities associated with navigating government bureaucracy.

There is the “Zero Contact Policy” prohibiting government officers or employees from unnecessary contact with an applicant, except during the preliminary assessment stage of the application and the evaluation of sufficiency of submitted requirements. In this way, the practice of “fixers” and “under the table” transactions are minimized.

Q: How can I resolve disputes or issues with government agencies?

A: Each office or agency must establish a public assistance or complaints desk within their premises where concerns or complaints can be submitted.

Q: What are violations and their consequences under the Act?

A: Without prejudice to other criminal, civil, or administrative liabilities, any person who violates the Act shall be held liable administratively and/or criminally and may face fines of up to P2 million and imprisonment of up to six years.

Violations may include (a) refusing to accept or process an application without due cause; (b) imposing requirements or fees not listed in the Citizen’s Charter; (c) failing to provide written notice for the disapproval of an application, to act upon an application within the prescribed time, attend to an applicant within the premises of the offices prior to the end of the official working hours and during lunch break, and or refusing to issue official receipts, and (d) fixing or colluding with fixers for economic or other gain.

Complaints may be filed with the Anti-Red Tape Authority.

Q: How will the government ensure the effective implementation of the Act?

A: The Civil Service Commission will maintain an Anti-Red Tape Unit.

Congressional Oversight Committee on Ease of Doing Business, the Anti-Red Tape Authority, and the Anti-Red Tape Council shall also regulate the law’s implementation. There is a “Report Card Survey” to monitor compliance and prevent hidden costs like bribes.

Q: Is the Ease of Doing Business Act effective?

A: There are varying opinions on this. It is a significant step towards improving the business climate, but there are concerns about its implementation and enforcement. The key is continuous monitoring and evaluation.