Show roadmap for digital taxation, Gatchalian urges BIR

Sen. Sherwin Gatchalian (Senate Public Relations and Information Bureau)

MANILA, Philippines — Sen. Sherwin Gatchalian on Tuesday urged the Bureau of Internal Revenue (BIR) to present its roadmap for its digital team collection system under the proposed Ease of Paying Taxes Act, which is now awaiting the president’s signature.

Gatchalian, chair of the Senate Committee on Ways and Means, expressed optimism that the new law will drive foreign direct investments and enhance the country’s competitiveness as an investment destination.

“Digitalization is the most important facet of this bill, and the measure seeks to mandate the BIR to come up with its digitalization roadmap that will be submitted to Congress and updated regularly,” he said.

The measure, Senate Bill No. 2224, was recently approved by a bicameral committee and awaits the signature of President Ferdinand Marcos Jr.

It aims to simplify tax filings for micro, small, and medium enterprises and allow most tax processes to be done online.

The new law also mandates a shift to an “invoice system” to accelerate value-added tax refunds and creates a special BIR division for small and medium taxpayers.

“With this new law, we expect to attract more investors who will be enticed to set up their business in the country because of the easier modes of tax payments available to them,” he said.

He expressed optimism that setting up the BIR’s digitalization program will ensure that its implementation will be sustained in the years ahead.

“We have a bad habit in the country that with every change of administration, there is a change of plan, a change in roadmap, a change in projects. More often than not, these [frequent changes] derail the implementation process because they completely change the system, the vendor, or the supplier that derails the project,” Gatchalian said.

He clarified, however, that the proposed BIR digitalization roadmap is subject to regular review by Congress to ensure constant implementation.

“What we envision is to make it easier for medium-sized foreign companies to set up shop here. We need to make it easier for them to navigate our tax system and to be tax compliant as easily as possible,” Gatchalian said.

The senator cited data from the Bangko Sentral ng Pilipinas that foreign direct investments in the country fell 20.4 percent to $3.911 billion in the first half of the year.

The decline from the $4.9-billion net inflows recorded in the first half of 2022 could be attributed to investor concerns emanating from persistent global uncertainties, Gatchalian said.