Cabinet musical chairs?

A new landmark law took effect without the usual signing ceremony at Malacañang Palace. President Ferdinand “Bongbong” Marcos Jr. (PBBM) signed on Friday Republic Act (RA) 11976, also known as “Ease of Paying Taxes Act.” As announced by Malacañang, this new law is expected to further improve the government’s tax collection efforts as well as “protect the taxpayers’ rights through digitalization.”

Approved by the 19th Congress before they adjourned for the Christmas recess last month, the “Ease of Paying Taxes Act” was among the priority administration measures mentioned twice by PBBM during his State of the Nation Address, first in July 2022 and then again in July 2023.

These amendments to the National Internal Revenue Code of 1997 supposedly aim “to update the Philippine taxation system, adopt best practices and replace antiquated procedures,” according to Presidential Communications Office (PCO) Secretary Cheloy Garafil. A lawyer by profession, Garafil cited the newly signed Ease of Paying Taxes law supports PBBM’s “8-Point Socioeconomic Agenda through the collection of more taxes to enhance economic and social development.”

RA 11976 was crafted in such a way to modernize and increase the efficiency of tax administration, Garafil stressed.

In plain language, this should enable the government to capture as many taxpayers as possible in the tax net by streamlining the system that will reduce tax-shaving and evading paying taxes. The same law is supposed to strengthen taxpayer rights and minimize their burden to comply with mandated tax payments.

Three days after the Palace announcement of RA 11976, Commissioner Romeo Lumagui Jr. of the Bureau of Internal Revenue (BIR) issued an “Advisory” that his agency will “cease collecting the Annual Registration Fee (ARF) from business taxpayers” effective Jan. 22 this year in compliance with Ease of Paying Taxes Law. The BIR chief initiated this action even without the implementing rules and regulations (IRR) yet for RA 11976. “To all Concerned Taxpayers, Revenue Officials and Employees,” the BIR chief disclosed, business taxpayers are exempt from filing BIR Form No.0605 and paying P500 ARF on or before Jan. 31 every year.