Lask week, I’ve attended a zoom conference on Digitalization Preparedness of Business Owner’s Small Medium Enterprises (SME) and Accounting Profession’s Small Medium Practitioner (SMP). There were invited speakers not only from the Philippines but also from other ASEAN Countries, such as from Singapore, Indonesia, Malaysia, etc.
The two (2) day conference discusses how SMEs and SMPs should (and can) adapt to rapid changing times by starting to learn and invest in automation or software primarily with their accounting and tax compliance work.
The organizers prepared several poll questions to assess the readiness of both SMEs and SMPs, and in one of the poll questions, this question was asked by one of the invited speaker from other ASEAN countries:
What is the most demanded non-regulated professional accountancy service category in the Philippines?
61% answered Tax Advisory as the most demanded service. I noticed that the invited speaker/presenter was a little bit speechless when he saw the result. If I remember it right, he was from Singapore or Malaysia. He then later admitted that he was really surprised to see the result, he wasn’t expecting Tax Advisory (61%) to be so far high compared from the rest of the other choices, such as: IT Advisory (17% of the poll result), Corporate Finance (13% of the poll result) and Risk Management (9% of the poll result).
That poll survey question showed the sad reality of how difficult it is to comply with Philippine Taxation, as compared to other ASEAN countries, that majority of resources of SMEs, and even SMPs, have to be spent on Tax Compliance. As such, it gives them very little time to other more important survival business aspects such as Corporate Finance, Risk Management and Keeping up with Digitalization.
But today, few days after that conference, I’m happy to have read and now I’m sharing this promising news of House Bill (HB) 8942 Ease of Paying Taxes (EOPT) Act that has been approved yesterday, September 6, 2021, during the second reading by The House of Representatives.
This is indeed a very timely act/law. And once it becomes final, it can help many taxpayers especially in this challenging time and the rising digitalization.
What is HB 8942 Ease of Paying Taxes (EOPT) Act?
Ease of Paying Taxes (EOPT) Act aims to simplify the tax compliance in the Philippines which is in line with the Digitization Roadmap of the Bureau of Internal Revenue.
Key Features of HB 8942 Ease of Paying Taxes (EOPT) Act
Though it’s still early to know what will be the final inclusion of this act, but here are some of the key features and benefits:
- Simplify tax compliance procedures by segmenting taxpayers and better tailoring processes.
- Enhance the portability of tax transactions and legislate the Taxpayer’s Bill of Rights. Taxpayer’s right will be the guiding principle in formulating and implementing tax policies and regulations.
- Creation of Taxpayer’s Advocate office in the Bureau of Internal Revenue (BIR) to act as the taxpayer’s recourse for issues with the bureau.
- Allow taxpayers to file for a Tax Identification Number (TIN) offsite.
- Removal of the required Annual Registration (probably the BIR Form 0605).
- Harmonization of venue rules to allow fully online filings with the BIR.
- Introduction of new segment called medium taxpayer classification.
- Streamlined procedures for small taxpayer.
- Cancel automatic BIR audits. Future audit will be based on risk assessment evaluations of the BIR.
- Removes the need to get Authority to Print (ATP) from the BIR for the receipts/invoices.
- Removal of business style.
- Harmonize recognition of VAT (Value Added Tax) by removing Official Receipt requirement for service which is unique in the Philippines. It will allow single document, invoice, as supporting document for both sale of service and goods.
We can still expect changes with HB 8942 Ease of Paying Taxes Act as it moves to the next level of legislative process before it becomes final. But it’s good to know that there are this promising changes we can look forward to that hopefully, one day, when the same poll question is asked, What is the most demanded non-regulated professional accountancy service category in the Philippines?, the answer will be different. Hopefully, tax advisory won’t be on the far top anymore.
