STARTING this year, business taxpayers are no longer required to pay the annual registration fee with the Bureau of Internal Revenue (BIR).
In an advisory on Jan. 8, 2024, the BIR said it will cease collecting the annual registration fee from business taxpayers effective Jan. 22, 2024, in compliance with Republic Act 11976, or the Ease of Paying Taxes Act.
“As a result, business taxpayers are exempt from filing BIR Form No. 0605 and paying the P500 annual registration fee on or before Jan. 31 every year,” it said.
President Ferdinand Marcos Jr. signed the Ease of Paying Taxes (EOPT) Act into law last Jan. 5.
The BIR said business taxpayers with an existing certificate of registration, which includes the registration fee, will remain valid. They can have the certificate of registration updated or replaced at the Revenue District Office where they are registered on or before Dec. 31, 2024.
This new tax policy also covers non-stock/non-profit organizations not engaged in business.
Wendell Ganhinhin, partner and deputy head for Tax Compliance and Advisory Services of P&A Grant Thornton, even before the EOPT, some non-government organizations (NGOs) are already exempted from the annual fee if they are not engaged in business. However, other NGOs have other activities subject to tax, hence, they need to pay the annual registration fee. Under the EOPT, all will already be exempted.
Cebu Chamber of Commerce and Industry president Charles Kenneth Co said such a measure is a welcome development for the business community.
“This will help reduce the cost of doing business as well as make it easier to do business,” said Co.
“We, from the business community, welcome this. This takes away one redundancy in our taxpayers’ obligations,” said Kelie Ko, president of the Mandaue Chamber of Commerce and Industry (MCCI). “We also hope that this is one of the many improvements that will be brought about by the Ease of Paying Taxes Act.”
Steven Yu, past president of MCCI, also said this new policy brings a lot of confidence and good tidings to start the new year. He said the Marcos administration and lawmakers are “tirelessly looking for ways to bring about the best economic climate for the business sector which will undoubtedly lead to economic progress for our country.”
The Ease of Paying Taxes will modernize and increase the efficiency and effectiveness of tax administration and strengthen taxpayer rights and allow the government to capture as many taxpayers as possible into the tax net by streamlining the system and minimizing the burden on taxpayers, increasing the country’s revenue collection in the long run.
“We are off to a good start this 2024. By making the tax system more taxpayer-friendly through simplified tax filings and protecting taxpayers’ rights, we will achieve our goal of encouraging and improving tax compliance,” said Finance Secretary Benjamin Diokno.
Ease of paying taxes
The new law will classify taxpayers into micro, small, medium, and large according to their gross sales to form a tax system that is responsive and specific to each segment’s needs.
Co said such an amendment is also a welcome move in a bid to help boost the country’s micro, small and medium enterprises, considered the backbone of the country’s economy.
Filing of returns and payment of internal revenue taxes, on the other hand, will also be made easier through electronic or manual means such as authorized agent banks or authorized software providers.
Moreover, the option to pay internal revenue taxes to the city or municipal treasurer with jurisdiction over the taxpayer was removed to encourage the shift to electronic payment channels. It also ensures the availability of registration facilities to taxpayers not residing in the country.
In terms of cumulative collection from January to October 2023, the BIR’s total collection stood at P2.132 trillion (net of tax refund), which is higher by 11.11 percent or P213.214 billion compared to tax collections for the same period in 2022.
For 2023, the BIR’s collection target was set at P2.639 trillion, which is higher by 12.99 percent or P303.500 billion than the 2022 actual collection.