The Joint Foreign Chambers (JFC) has backed the proposal now forming part of the Comprehensive Tax Reform Package requiring the use of e-invoices and e-receipts in commercial transactions between registered companies, their customers and the Bureau of Internal Revenue (BIR).
In a position paper submitted to the House Committee on Ways and Means, the foreign chambers said the Philippines should optimize its use of digital technology when addressing merchant red tape and transaction flows in the country.
“While we do not know how much of the traffic involves moving paper invoices and official receipts between businesses and their clients, we believe that encouraging the maximum use of digital technology is an important policy [tool] to easing traffic congestion,” the foreign chambers said.
“The [Duterte] administration has determined that there is traffic emergency in Manila and Cebu, and requested emergency powers to implement solutions,” the group added.
The Japan International Cooperation Agency estimated the daily cost of mercantile traffic in the National Capital Region alone stands at some P2.4 billion.
According to the foreign chambers, digital technology is an important tool helping ease the cost of doing business in the Philippines.
“The Philippines should clearly do more, as measured by the United Nations e-governance Survey. In 2003 the country ranked 33rd of 193 countries rated, but in 2016 had fallen to 71st of 193 countries,” it said.
“Slow adaptation of digital technology by the government in its interactions with the public is reflected in these rankings,” the foreign groups added.
Currently, the government allows the use of e-invoicing under existing revenue regulations.
“[However] institutionalizing the use of e-invoices is definitely a step toward the right direction, given the move to digitize all information,” the business groups said.
The foreign chamber also asked the House of Representatives to consider the proposal amending Section 113 of the National Internal Revenue Code by adding a new paragraph.
The group said the insertion should read, “the use of e-invoice and e-receipt shall become mandatory within five years of enactment of this law, regardless of whether or nor they are part of a computerized accounting system.”
“Taxpayers are no longer required to submit traditional hard copy [paper copy] of their invoice or official receipt with any compliance requirements of the Bureau of Internal Revenue [BIR]. The BIR shall simplify the invoicing and receipting data required of the taxpayer by only requiring name and tax identification number. The BIR may exempt tax- payers from this requirement if they can demonstrate sufficient reasons for noncompliance,” the JFC-proposed amendment added.
The JFC is a coalition of the American, Australia-New Zealand, Canadian, European, Japanese and Korean chambers, as well as the Pamuri.
The group represents over 3,000 member -companies engaged in over $100 billion worth of trade and some $30 billion worth of investments in the Philippines.
The House of Representatives is the one who pushed for the inclusion of the mandatory use of e-invoice and e-receipt in the DOF-backed Comprehensive Tax Reform Package.
Under the tax package, a value-added tax (VAT)-registered person shall issue an electronically generated VAT invoice for every sale, barter or exchange of goods or properties.
It also said an electronically generated VAT official receipt for every lease of goods or property and for every sale, barter, or exchange of services shall also be issued.
Finance Undersecretary Karl Chua, at the House hearing on the tax package on Wednesday, endorsed the use of e-receipts, the interconnectivity and data-sharing as these tools will enhance tax administration in the country.
Chua, however, raised particular issues on the implementation of e-invoices and e-receipts.
He said the question of timing their adoption is important “because this will require also significant investments both in the BIR and the taxpayers to automate and to move to the mandated operating system, the interconnectivity and issuance of e-receipts.”
Cua also cited the issue of who to prioritize among the taxpaying public: “Starting from the large, going to the medium and finally to the rest of the taxpayers.”
“Third, we also need to consider that not all industries benefit or find the POS [point-of-sale] machine interconnection cost-effective. I think it’s more effective at the retail level when this is mandated for all sectors that have very limited transactions,” he said.
According to him, the question of cost-effectiveness is something that “we [in the BIR] need to study.”
BIR Commissioner Caesar R. Dulay, mean-while, said the tax agency has created a technical working group to address issues that may arise during the implementation of e-invoices and e-receipts.
“The proposed amendments are very helpful in terms of revenue generation and, for our part, we are ready to implement whatever provisions are finally approved,” he said.
In a bid to rid the agency of deep-seated graft and corruption, Dulay called for the resignation or early retirement of at least 300 allegedly corrupt employees and officials before the adoption of administrative reforms at the agency.
“We are aware on the problem of graft. I’m happy to share that we are slowly addressing the issue,” he said.
“We are slowly working on bad eggs. I suggested they either resign or take advantage of optional retirement,” he said.
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Autor(en)/Author(s): Jovee Marie de la Cruz
Quelle/Source: Business Mirror, 15.02.2017
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