Republic of the Philippines Aq eEPRE SEX
HOUSE OF REPRESENTATIVES Ay o
Quezon City, Metro Manila S$ RECEIVED 2)

NINETEENTH CONGRESS
First Regular Session

Aouse siti no. 7403

Introduced by Rep. LORETO B. ACHARON

EXPLANATORY NOTE

This bill seeks to legislate a “Taxpayers Bill of Rights and Obligations” to address the
systemic problem of abuses or harassment of a number of officers and employees of the
Bureau of Internal Revenue (BIR) and the Bureau of Customs (BOC).

Not only is this measure primarily aimed to protect taxpayers against threats on their
rights, particularly unwarranted pressures arising from the undue exercise of discretion
by tax authorities, the bill also includes fundamental information to make taxpayers aware
of their basic rights and obligations without the need to consult the tax code and
numerous tax laws and statutes that are too many and complex to understand, given
that these rights are not new and are even already enshrined in the 1987 Philippine
Constitution.

ANational Taxpayers’ Advocate Office is also hereby created to ensure that not only these
rights are safeguarded but also to serve as the champion of every taxpayer, and provide
remedies for taxpayer’s concerns, more particularly those who are taken advantage of or
ignored.

In view of the foregoing, the immediate passage of this measure is earnestly sought.

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Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City, Metro Manila

NINETEENTH CONGRESS
First Regular Session

House BiLL No, 7403

Introduced by Rep. LORETO B. ACHARON

AN ACT PROVIDING FOR THE
BILL OF RIGHTS AND OBLIGATIONS OF TAXPAYERS, CREATING THE
OFFICE OF THE NATIONAL TAXPAYER ADVOCATE, APPROPRIATING
FUNDS THEREFOR, AND FOR OTHER PURPOSES

Be it enacted by the Senate and House of Representatives of the Philippines in
Congress assembled:

SEC. 1. Title. — This Act shall be known as "The Taxpayer's Bill of Rights and
Obligations Act."

SEC. 2. Declaration of Policy. — Its hereby declared the policy of the State
to provide increased protection of taxpayers’ rights in complying with their obligation
to pay national and local taxes to the government, to the end that abuses committed
against taxpayers are prevented, if not completely eradicated, and taxes are collected
responsibly, with due regard for taxpayers’ rights. In turn, taxpayers are expected to
faithfully comply with their tax obligations to the government.

SEC. 3. Definition of Terms. ~ As used in this Act, the following terms shall
mean:

a) Assessment refers to the process of determining the amount of taxes, duties, and
other charges to be paid by the taxpayer;


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b) Revenue Authority refers, singly or collectively, to the Bureau of Internal Revenue
(BIR), Bureau of Customs (BOC), Local Government Units (LGUs), and other tax
collecting agencies;

©) Revenue Officers refer to the officers, employees, and agents of the revenue
authorities;

) Summary Collection refers to the civil remedy of the government for the collection
of accounts receivable or delinquent accounts by garnishment or distraint of personal
property, or levy of real property;

e) Taxes refer to all taxes imposed under the National Internal Revenue Code (NIRC)
of 1997, as amended, the Customs Modernization and Tariff Act of 2016, the Local
Government Code of 1991, as amended, and all other tax laws, rules and regulations,
including those collected by other tax collecting agencies;

f) Taxpayer refers to any person, whether natural or juridical, subject to the tax
imposed by the national and local government; and

9) Tax Audit refers to the examination into a taxpayer's obligation, and compliance
with tax laws, rules and regulations by the BIR, BOC, LGUs, or other tax collecting
agencies, as the case may be.

SEC. 4. Taxpayer's Bill of Rights and Obligations. — Notwithstanding the
rights and remedies of the taxpayer provided for in the National Internal Revenue
Code (NIRC) of 1997, as amended; Customs Modernization and Tariff Act (CMTA);
Republic Act (RA) No. 1125, creating the Court of Tax Appeals (CTA), as amended;
Book II of the Local Government Code of 1991, as amended; and all other laws, rules
and regulations, issuances, and circulars in support thereof, the taxpayer is hereto
granted basic taxpayer rights, whether at the administrative level or at the judicial
level. Provided, That nothing in this Act shall amend the jurisdiction of the courts and


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quasi-judicial agencies, as provided for by law, nor deprive the Judiciary of its power
to promulgate rules and procedures in all courts.

Accordingly, the taxpayer is expected to observe and comply with tax
obligations enumerated in this Act and in other relevant laws, rules, and regulations
that are implemented by revenue authorities.

SEC. 5. Taxpayer's Basic Rights. — The following are the taxpayer's basic
rights:

a) Right to Information. - The taxpayer shall have the right to know in a simplified
manner how one can comply with laws, rules and regulations implemented by revenue
authorities. The taxpayer is entitled to clear, complete, accurate, and simplified
explanation of tax laws, rules, regulations, and procedures, as well as be apprised of
taxpayer's rights and obligations in all tax forms, publications, notices,
correspondences, assessments, rulings, and decisions.

In case of any deficiency tax findings or alleged violations, the taxpayer shall have
the right to be clearly and sufficiently informed in writing of the facts and laws
thereon, including any supporting computation or documentation, or both, upon
which they are based, at the same time such findings or violations are communicated.

Unless prejudicial to the government, the taxpayer shall have the right to be informed
of any impending institution by revenue authorities of a summary collection action,
which requires sale or seizure of property or the freezing of assets.

2) Right to fair and faithful application of laws. - The taxpayer shall have the right to
a fair and faithful application of laws, rules, regulations, and other issuances of
revenue authorities in all proceedings involving the taxpayer.

©) Right to challenge the position of and be heard by revenue authorities. - The
taxpayer shall have the right to challenge and raise objections against the findings,
assessments, rulings, or decisions of the revenue authorities, unless otherwise
prohibited by law.


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¢) Right to present evidence and witnesses. - The taxpayer shall have the right to be
given ample and adequate opportunity to present evidence in the possession of the
taxpayer or any third party, and call on witnesses to testify, as the case may be, that
would assist the taxpayer in the pursuit of the case.

©) Right to be assisted or represented by a qualified professional. - The taxpayer shall
have the right to be assisted or represented by a competent and independent qualified
professional, such as a legal counsel, accountant, or customs broker, of the
Taxpayer’s own choice, in all administrative, civil, or criminal tax proceedings.

In case the taxpayer experiences financial difficulty in engaging the services of a
private counsel or qualified professional, the Office of the National Taxpayer Advocate
(ONTA) shall provide free and effective representation to the taxpayer, upon the
latter's request.

1) Right to timely and expeditious completion of tax audits. The taxpayer shall have
the right to have revenue authorities begin and complete tax audits in a timely and
expeditious manner.

9) Right against baseless assessment. - Except in cases allowed by law, the tax
authorities are prohibited from issuing assessments against taxpayers without the
benefit of an audit conducted against taxpayers. Otherwise, such assessments shall
be void.

‘h) Right to be given an opportunity for amicable settlement. — Unless contrary to laws,
rules and regulations, the taxpayer shall have the opportunity to amicably settle the
taxpayer's deficiencies and delinquencies, at any stage of the proceedings: Provided,
That said settlement must be in writing and duly signed by the parties or their agent.

1) Right to avail of installment payment. — In so far as may be permitted by law, the
taxpayer shall have the right to settle tax liabilities through installment payments.

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J) Right to relief from paying interests and penalties. - The taxpayer shall be entitled
to a reduction of interests and penalties levied on their tax liabilities in case of any
unjustifiable error or delay caused by the revenue authorities, including instances of
loss of records, personnel transfers, extended illness or leaves of absence, and
Personnel training, resignation, retirement, or termination from service of the
concerned personnel.

) Right to recover actual costs and actual damages arising from judicial actions. —
The taxpayer shall have the right to recover actual costs and actual damages,
including attorney's fees and expenses of litigation, arising from judicial actions, as
may be determined by a court of competent jurisdiction.

1) Right to quality service and assistance. — The taxpayer shall have the right to be
treated professionally, courteously, fairly, and reasonably by revenue authorities.

‘m) Right to privacy. ~The taxpayer shall have the right to privacy of communication
and correspondence, as guaranteed by the Constitution, and the Data Privacy Act of
2012. The taxpayer shall have the right to demand that any information provided to
revenue authorities shall not be disclosed and shall be kept confidential, unless
disclosure is expressly authorized by law or by the taxpayer.

SEC. 6. Taxpayer's Basic Obligations. - Complementary to the above
taxpayer's rights are the following duties and responsibilities of the taxpayer:

a) Observe and comply with tax laws, rules, and regulations;

b) Truthfully and timely disclose complete and correct information as required by tax
laws, rules, and regulations, including but not limited to, registered address, official
email address, registered activities, tax type details, and accounting period;


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) Lodge and submit, either personally or through electronic means, in a timely
manner all relevant information, books of accounts, reports, records, returns, and
other documents to revenue authorities on or before the dates set by tax laws, rules,
and regulations;

d) Exercise reasonable care and diligence in complying with all tax obligations;

e) Keep accurate records of the required books of accounts and other tax information
for the duration required by law, rules, and regulations, and make them available for
examination by revenue officers following proper procedures;

f) Cooperate with revenue authorities in the latter's conduct of tax audits in
accordance with laws, rules, and regulations; and

g) Timely pay the taxes due to the government through any available payment
channels.

SEC. 7. Creation of the Office of the National Taxpayer Advocate. —
In order to protect the rights of taxpayers, both substantive and procedural, the ONTA
is hereby created to promote tax compliance and assist taxpayers. The ONTA shall be
an independent and autonomous office attached to the Department of Justice (DOJ)
for purposes of policy and program coordination.

The ONTA shall have the power to provide for the structural organization and
staff of its offices and shall have the power and authority to designate and appoint
officers and employees of the Office and create divisions and units, including regional
or provincial offices, as may be necessary, subject to the approval of the Department
of Budget and Management (DBM) and in accordance with civil service laws, rules,
and regulations: Provided, That all employees shall be subject to Republic Act No.
6758, otherwise known as the Salary Standardization Act.


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SEC. 8. Powers, Functions and Responsibilities of the Office of the
National Taxpayer Advocate. — The ONTA shall have the following functions,
powers, and responsibilities:

a) Assist the public in their tax queries and concerns relative to taxes;

b) Represent taxpayers, and assist, initiate, and intervene, as may be applicable, in
tax cases, complaints, and proceedings, after due evaluation: Provided, That the
qualifications and disqualifications of taxpayers who shall be given priority in the
ONTA's representation services shall be in relation to Section 5(e) of this Act.

©) Engage in regular information, education, and communication programs for all
taxpayers on tax laws, rules, regulations, circulars, including those that implement
‘Supreme Court decisions, and other issuances that affect them, including their rights
and remedies under the law;

d) Recommend remedial administrative measures to revenue authorities by way of
continuing policy review, and to the Anti-Red Tape Authority for purposes of reducing
regulatory burden to taxpayers;

e) Monitor tax issuances of revenue authorities, and propose recommendations, when
necessary, at the administrative level, to ensure that taxpayers’ rights as provided in
this Act are upheld;

f) Develop capacity building programs, and conduct the necessary trainings for the
officials and employees of ONTA; and

4) Perform such other powers and functions as may be necessary to enhance the
ONTA’s performance of its powers, functions, and responsibilities, as enumerated in
this Act.


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SEC. 9. The Chief Taxpayer Advocate and Deputy Taxpayer
Advocates, - The ONTA shall be headed by the Chief Taxpayer Advocate, who shall
have the primary authority and responsibility for the effective exercise of its mandate
and the discharge of its powers and functions. The Chief Taxpayer Advocate shall be
assisted by Deputy Taxpayer Advocates, one (1) each for the National Capital Region,
Luzon, Visayas, and Mindanao.

The Chief Taxpayer Advocate and Deputy Taxpayer Advocate shall be Filipino
citizens, at least forty (40) years of age, members of the Philippine Bar in good
standing, with at least ten (10) years of practice in the field of taxation with proven
integrity and competence and must not have been convicted of any crime involving a
violation of any tax laws and rules, and of any crime involving moral turpitude.

SEC. 10. Appointment, Term, and Rank. ~The Chief Taxpayer Advocate
and Deputy Taxpayer Advocates shall be appointed by the President: Provided, That
the appointment of the Deputy Taxpayer Advocates shall be upon the
recommendation of the Chief Taxpayer Advocate. They shall both serve for a fixed
term of seven (7) years with one (1) re-appointment.

The Chief Taxpayer Advocate and Deputy Taxpayer Advocates shall have the
equivalent rank, salaries, allowances, and retirement benefits as the Prosecutor-
General and Senior Deputy State Prosecutor of the National Prosecution Service,
respectively.

SEC. 11. Disqualification. — An individual cannot be appointed as the Chief
Taxpayer Advocate or Deputy Taxpayer Advocate if such individual has been an
employee or officer of, or has rendered service as consultant or in any other capacity
to any of the revenue authorities for two (2) years prior to such appointment.

SEC. 12. Submission of Annual Reports. — The Congressional Oversight
Committee on the Comprehensive Tax Reform Program (COCCTRP) shall exercise
‘oversight powers over the implementation of this Act.


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To this end, the ONTA shall submit a detailed report on its activities and
identified problem areas, either personally or through electronic means, to the
COCCTRP on or before December 31 of every year, copy furnished the Secretary of
Finance, particularly on identified areas in which taxpayers have problems in dealing
with revenue authorities.

Afterwards, on or before June 1 of every year, the Secretary of Finance shall
submit a report in relation to the ONTA's report, either personally or through
electronic means, to the COCCTRP and shall include appropriate remedial action, if
any, or proposed legislation, and other recommendations on the proper
implementation of this Act.

SEC. 13. Penalties for the Violation of the Bill of Rights of Taxpayers.
— Notwithstanding the administrative remedies provided in the National Internal
Revenue Code (NIRC) of 1997, as amended; the Customs Modernization and
Tariffication Act of 2016 (CMTA); R.A. No. 1125 creating the Court of Tax Appeals
(CTA), as amended; and Book II of the Local Government Code of 1991, as amended,
any person or revenue officer who is found to have violated Section 5 of this Act shall
be punished with imprisonment of not less than six (6) months nor more than six (6)
years, or a fine of not less than One Hundred Thousand Pesos (Php100,000.00) but
not more than One Million Five Hundred Thousand Pesos (Php1,500,000.00), or both.

SEC. 14. Accessibility of the Taxpayer's Bill of Rights and Obligations.
— The Taxpayer's Bill of Rights and Obligations shall be made available in all offices
of revenue authorities, free of charge, in all formats, digital or otherwise, and shall be
posted in their respective websites, in English and Filipino language.

SEC. 15. Integration of Taxpayer's Bill of Rights and Obligations in
Higher Education curriculum. — All public and private higher education institutions
shall integrate the Taxpayer's Bill of Rights and Obligations as part of the curriculum.
The Commission on Higher Education (CHED), pursuant to its mandate under RA No.


7722, otherwise known as the "Higher Education Act of 1994," shall develop the
Program to execute and implement this Section.

SEC. 16. Appropriations. — The amount necessary for the implementation
of this Act including the funding for the establishment, yearly operations and
maintenance of the ONTA shall be included in the Annual General Appropriations Act.

SEC. 17. Implementing Rules and Regulations. — Within sixty (60)
calendar days from the effectivity of this Act, the DOJ, in consultation with the DOF,
DBM, DILG, BIR, BOC, Civil Service Commission (CSC), CHED, ARTA, and the private
sector shall promulgate the necessary rules and regulations, for the effective
implementation of this Act.

SEC. 18. Separability Clause. — If any provision of this Act is declared
invalid or unconstitutional, other provisions hereof which are not affected thereby
shall remain in full force and effect.

SEC. 19. Repealing Clause. — A\l laws, orders, decrees, rules and
regulations, and other parts thereof inconsistent with the provisions of this Act are
hereby repealed, amended or modified accordingly.

SEC. 20. Effectivity. — This Act shall take effect fifteen (15) days after its
Publication in the Official Gazette or in at least two (2) national newspapers of general
circulation.

Approved,

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