By Euney Marie Mata-Perez on May 27, 2021

We need a charter, which the Philippines has yet to adopt, to protect taxpayers against threats to their rights. In 2019, then Senator Ralph Recto filed Senate Bill (SB) 1163, a proposed act ordaining a Bill of Rights for Taxpayers. In his explanatory note, Recto acknowledged the need to protect taxpayers vis-à-vis the government’s mandate to collect revenues. Unfortunately, nothing has happened to the bill.

Earlier this year, the House Ways and Means Committee chaired by Albay Representative Joey Sarte Salceda approved measures seeking to make paying taxes easier. House Bill (HB) 8942 (in substitution of HBs 7881 and 7415) or the proposed “Ease of Paying Taxes Act,” authored by Salceda, introduces amendments to the National Internal Revenue Code (Tax Code) to ensure that the correct amount of taxes is paid and collected in the most convenient manner.

The four fundamental changes that HB 8942 seeks to introduce are: taxpayer classification, relaxed rules on returns filing and the payment of taxes, uniform documentation for substantiating value-added tax transactions, and easing compliance requirements. In addition, HB 8942 proposes to add a new Section 291 to the Tax Code that enumerates the basic taxpayers’ rights, which shall be in addition to the rights and remedies of the taxpayer provided for in the other sections of the Tax Code. The Ways and Means committee submitted its committee report on March 9, 2021.

As proposed by HB 8942, taxpayers have to right to:

• pay no more than the correct amount of tax;
• a fair and impartial appeal;
• timely and easy to understand information;
• quality tax education and service;
• consistent and transparent application of the law;
• have the cost of compliance respected whenever tax rules are prepared and enforced;
• privacy and confidentiality of information, unless authorized by the taxpayer or by law;
• speedy disposition of cases, assessments, audits, investigation and other similar actions;
• finality of tax cases, including, but not limited to, agreement on the amount of tax due; and
• be protected and seek redress against malicious, excessive and wrongful assessments.

There are rights proposed in SB 1163 that are similar to those proposed in HB 8942. However, the rights provided in SB 1163 are set out in more detail as the bill envisions a stand-alone law setting out those rights. SB 1163 divides the bill of rights into three main pillars, namely: taxpayers’ basic rights, taxpayers’ rights in civil cases, and taxpayer’s rights in criminal cases.

These rights include:

• the right to be informed of any pending assessment or investigation for criminal cases;
• the right to due process;
• the right to a speedy and impartial disposition of cases;
• the right to privacy and the right to have any case or proceeding, including third-party information requests, be devoid of publicity;
• the right to have taxpayer’s tax information be kept confidential unless otherwise authorized by law;
• the right to fair and consistent application of tax laws;
• the right to have the Bureau of Internal Revenue begin and complete its audits in a timely and expeditious manner;
• the right to request for installment payment of tax liabilities under any compromise settlement or any assessed tax liabilities;
• the right to recover attorney’s fees and litigation costs for tax assessments made without substantial justification, and claims for refunds that are not acted upon for an unreasonable length of time at the administrative level or denied at the administrative level but subsequently allowed by the Court of Tax Appeals if it appears that the denial was unjustified;
• the right to have interests and penalties abated in case of any unjustified error or delay caused by the tax authorities or their agents, including ministerial acts such as loss of records, personnel transfers, etc.; and
• the right to have the assistance of counsel in criminal proceedings, should the taxpayers request for it.

What is significant is that HB 8942 proposes the inclusion of the rights to pay no more than the correct amount of tax, timely and easy to understand information, and quality tax education and service. All these can add to the ease of taxpayers in paying taxes, which is the object of the bill.

We believe that a taxpayer’s bill of rights should also set out principles of good taxation – as a foundation or basis – such as the following: the right to a fair and equitable tax system that is administered fairly, honestly, and with integrity, according to the law, without bias or preference; and the right to have tax rules and systems that are clear and certain.

All taxpayers will welcome the passage of a taxpayers’ charter, whether as a separate law or as a new provision in the Tax Code. This charter, though, should be comprehensive enough to be effective against abuse and to afford taxpayers real and adequate protection. The other key element will of course be the proper implementation and due respect of the rights of taxpayers.

It has been established that a tax system that is fair and equitable and fosters respect for taxpayers’ rights will garner more voluntary compliance and trust from taxpayers. We hope that we get there.

#SB1163 #TaxpayersCharter #EaseOfPayingTaxes #HB8942 #TaxpayersRight #RightOfTaxpayers

Euney Marie J. Mata-Perez is a CPA-lawyer and the managing partner of Mata-Perez, Tamayo & Francisco (MTF Counsel). She is a corporate, merger and acquisition, and tax lawyer, and is president of the Asia-Oceana Tax Consultants’ Association.

This article is for general information only and is not a substitute for professional advice where the facts and circumstances warrant. If you have any questions or comments regarding this article, email the author at info@mtfcounsel.com or visit the MTF website at www.mtfcounsel.com

https://www.manilatimes.net/2021/05/27/business/top-business/pushing-for-a-taxpayers-charter/1800808