The Philippines Calls for a Further Simplified Tax System
Over the past year, the Philippines has been making great strides in improving its business environment. Chief among these improvements has been the government’s efforts to simplify the country’s tax system. While the initial steps in this area have met with some success, there have been calls from within and outside of the government to further improve the tax system.
In February of this year, in order to make filing tax returns simpler and encourage more tax compliance from taxpayers, the Philippines’ Bureau of Internal Revenue (BIR) announced that it had expanded the number of taxpayers who must now use e-filing to pay their taxes. Taxpayers will now have to enroll, file returns, and pay taxes early using the BIR Electronic Filing and Payment (eFPS) System or use electronic BIR Forms (eBIRforms).
The Philippines is attempting to bring the time it takes for taxpayers to complete their tax obligations down to levels seen in Malaysia (133 hours), Brunei (93 hours), and Singapore (82 hours). It currently takes an average of 193 hours to comply with all tax obligations in the Philippines. The government also wants to reduce the number of payments required.
However, problems have surfaced with the new e-filing system, these have included technical problems on the BIR website and poor training of BIR officials who have been tasked with helping taxpayers navigate the tax system. Additionally, the tax system is still very much a “one-size fits all” model, meaning that there is little difference in the tax requirements for millionaires and those for poor people.
Sonny Angara, the Chairman of the Senate Ways and Means Committee is leading the calls for further simplification of the country’s tax system. In a recent interview, the Chairman stated “While we laud the efforts of the BIR to make taxation more transparent and efficient by implementing the electronic filing and payment system, it seems that many still find the new system more cumbersome and costly with the extra steps they have to take to file and pay their annual income tax.”
Angara has recommended minimizing the number of steps and requirements involved in the tax filing and payment process. He has also suggested reducing the number of forms and fees associated with the process. Angara hopes that these changes will help to further increase tax compliance, widen the country’s tax base, and increase revenue collection.
Asia Briefing Ltd. is a subsidiary of Dezan Shira & Associates. Dezan Shira is a specialist foreign direct investment practice, providing corporate establishment, business advisory, tax advisory and compliance, accounting, payroll, due diligence and financial review services to multinationals investing in China, Hong Kong, India, Vietnam, Singapore and the rest of ASEAN. For further information, please email email@example.com or visit www.dezshira.com.
Stay up to date with the latest business and investment trends in Asia by subscribing to our complimentary update service featuring news, commentary and regulatory insight.
Tax, Accounting, and Audit in Vietnam 2014-2015
The first edition of Tax, Accounting, and Audit in Vietnam, published in 2014, offers a comprehensive overview of the major taxes foreign investors are likely to encounter when establishing or operating a business in Vietnam, as well as other tax-relevant obligations. This concise, detailed, yet pragmatic guide is ideal for CFOs, compliance officers and heads of accounting who need to be able to navigate the complex tax and accounting landscape in Vietnam in order to effectively manage and strategically plan their Vietnam operations.
An Introduction to Tax Treaties Throughout Asia
In this issue of Asia Briefing Magazine, we take a look at the various types of trade and tax treaties that exist between Asian nations. These include bilateral investment treaties, double tax treaties and free trade agreements – all of which directly affect businesses operating in Asia.
The 2015 Asia Tax Comparator
In this issue, we compare and contrast the most relevant tax laws applicable for businesses with a presence in Asia. We analyze the different tax rates of 13 jurisdictions in the region, including India, China, Hong Kong, and the 10 member states of ASEAN. We also take a look at some of the most important compliance issues that businesses should be aware of, and conclude by discussing some of the most important tax and finance concerns companies will face when entering Asia.