Exercising his power to veto, President Rodrigo Duterte inked the 106-paged Tax Reform Acceleration and Inclusion into law removing five provisions from the original enrolled bill that will not only update our archaic tax system, but also chip in to his “Build, Build, Build” priorities which will benefit more than 7.5 million Filipinos to take effect on January 1, 2018.
The President rejected the reduction of the income tax of employees of Regional Headquarters (RHQs). Offshore Banking Units (OBUs) and Petroleum Service Contractors and Subcontractors. This means employees from these companies must follow the progressive tax rates applicable to other individual taxpayers.
According to the President, making the sales of goods and services to separate customs territory and tourism enterprise zones zero-rated would create seepages in our tax system. Thus, vetoed it as well.
Abuse as what Duterte sees the provision on exempting from percentage tax on gross sales/receipts not exceeding five hundred thousand pesos (P500,000.00), he also rejected this line item in his letter to the Congress.
President Duterte believes that exemption of various petroleum products from excise tax when used as input, feedstock, raw material in the manufacturing of petrochemical products, or in the refining of petroleum products, replacement fuel for natural gas fired combined cycle power plants would lead to abuse and erosion of revenues for the government.
Lastly, redundancy of the Sin Tax Law of 2012 (RA 10351) which provides guaranteed funds for universal health care led Duterte to discard the earmarking (fund designation) of incremental tobacco taxes.
Are you ready for the change? With the expected decline in income tax collections from salaried taxpayers, the Bureau of Internal Revenue (BIR) is expected to be more aggressive in running after tax evaders and violators are not paying the right taxes. With or without a general tax amnesty, now more than ever, taxpayers both individuals and corporations must be a partner of BIR in collecting the right taxes.
In the recently issued RMC 60-2017, taxpayers have the option to subscribe to the Seal of Honesty (SOH) Certification Program that will aid to improve their voluntary compliance as allies in nation building, subject to full satisfaction of the criteria set by the Circular. With the Seal comes issuance of annual tax clearance, last priority audit and other privileges which DTI and other government agencies may extend.
In our social enterprise, we consider citizen tax planning as a game-changing strategy to help taxpayers pay the right taxes without the burden of unnecessary penalties and compromises. It’s an investment to help individuals and corporations save millions of taxes from unplanned tax compliance resulting to higher tax assessments with more than 200% penalties during BIR audit, while helping in nation building by paying the right taxes.
For inquiries about the Seal of Honesty (SOH) Certification Program, e-mail us at [email protected] or call (+63) 622 7720.