The House Ways and Means Committee has approved a bill mandating the creation of an electronic data interconnectivity between the Bureau of Internal Revenue (BIR) and the country’s businesses that use cash-register machines (CRM) or point-of-sales (POS) machines.
Quirino Rep. Dakila Carlo E. Cua, chairman of the committee and author of the approved House Bill 4601, explained that the proposed law aims to remove burdensome compliance for tax requirements and promote transparency in businesses with bulk transactions.
“Mandating interconnection between the BIR and appropriate government agencies will provide the BIR with third-party information, easier VAT refund mechanism, and data collection. This will also put our country at par with other countries already using interconnectivity between the tax authority and businesses,” Cua said.
Department of Finance assistant secretary Ma. Teresa Habitan and BIR legal counsel Nina Asuncion expressed their support for the bill during the hearing.
Likewise, Drugstore Association of the Philippines (DSAP) president Alberto Hechanova conveyed his support for the bill. But he requested that in the implementation of the law, ample time should be given to DSAP members to comply with the requirements.
Department of Information and Communications Technology (DICT) project manager Cesar Vinuya said the DICT is currently putting up the necessary infrastructure that would create electronic linkages among government agencies. The DICT also intends to replicate this system as well in the business sector.
Under the bill, VAT-registered taxpayers shall acquire CRM/POS machines and link them to the BIR servers at their expense. They shall also ensure that the CRM/POS machines have the capacity to simultaneously transmit data entered on the machines to the servers of the BIR.
The BIR creation of an electronic system and the VAT registered taxpayers’ linkage to it shall be done within one year and six months upon the passage of the law.
Also, within one year and six months after the enactment of the law, the BIR shall establish electronic interconnectivity with the Bureau of Customs (BOC), Land Transportation Office (LTO), Department of Trade and Industry (DTI), Department of Agriculture (DA), Securities and Exchange Commission (SEC) and other appropriate government agencies to enhance the revenue effort of the government.
The data processing of sales and purchase data shall also comply with the provisions of Republic Act 10173 or the “Data Privacy Act.”
Meanwhile, the bill also provides that any VAT-registered taxpayer who fails to link the CRM/POS machines to the BIR servers due to negligence or intent to defraud the government shall pay a penalty amounting to one-half of one percent of the annual net income as reflected in the VAT-registered taxpayer’s audited financial statement for the second year preceding the current taxable year for each day of violation.