NINETEENTH CONGRESS OF THE ) 
REPUBLIC OF THE PHILIPPINES ) 
First Regular Session 
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SENATE
S.B. NO. 2224
23 MAY 22 P6 58
RtCEiVbO &■ „
(In substitution of Senate Bill No. 1346, taking into consideration 
House Bill No. 4125 and Senate Bill No. 2128)
Prepared by the Committee on Ways and Means with Senators Gatchalian and
Villanueva as authors thereof
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AN ACT
INTRODUCING ADMINISTRATIVE TAX REFORMS, AMENDING SECTIONS 
21, 22, 34, 51, 56, 57, 58, 76, 77, 81, 90, 91, 103, 106, 108, 109, 110, 112, 
113, 114, 115, 116, 117, 118, 119, 120, 128, 200, 204, 236, 237, 241, 242, 
243, 245, 248, AND 269 OF THE NATIONAL INTERNAL REVENUE CODE OF 
1997, AS AMENDED, AND FOR OTHER PURPOSES
Be it enacted by the Senate and the House of Representatives of the Phiiippines in 
Congress assembied:
SECTION 1. Tide. - This Act shall be known as the "Ease of Paying Taxes Act." 
SEC. 2. Deciaration ofPoiicy. - It is hereby declared the policy of the State:
(1) To provide a healthy environment for the tax paying public that protects 
and safeguards taxpayer rights and welfare, as well as assures the fair treatment of 
all taxpayers;
(2) To modernize tax administration and improve its efficiency and effectiveness 
by providing mechanisms that encourage proper and easy compliance at the least cost 
and resources possible;
(3) To update the taxation system, adopt best practices, and replace antiquated 
procedures; and


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(4) To enact policies and procedures, which are appropriate to different types
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of taxpayers.
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SEC. 3. Section 21 of the National Internal Revenue Code of 1997, as amended,
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is hereby amended to read as follows:
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"SEC. 21. Sources of Revenue AND CLASSIFICATION OF
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TAXPAYERS-
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(A) NATIONAL INTERNAL REVENUE TAXES - The following
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taxes, fees, and charges are deemed to be national internal revenue
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taxes:
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"[(a)] (1) Income tax;
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"[(b)] (2) Estate and donor's taxes;
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"[(c)] (3) Value-added tax;
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"[(d)] (4) Other percentage taxes;
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"[(e)] (5) Excise taxes;
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"[(f)] (6) Documentary stamp taxes; and
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"[(g)] (7) Such other taxes as are or hereafter may be
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imposed and collected by the Bureau of Internal
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Revenue.
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"(B) CLASSIFICATION OF TAXPAYERS - FOR PURPOSES
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OF RESPONSIVE TAX ADMINISTRATION, THE SECRETARY OF
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FINANCE, UPON RECOMMENDATION OF THE COMMISSIONER,
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SHALL ESTABLISH REASONABLE CRITERIA FOR CLASSIFYING
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TAXPAYERS INTO MICRO, SMALL, MEDIUM, AND LARGE,
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TAKING INTO CONSIDERATION THEIR CAPACITY TO COMPLY


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WITH TAX LAWS, RULES, AND REGULATIONS, THE AMOUNT 
AND TYPE OF TAX PAID, THE GROSS SALES OF THE TAXPAYER, 
AS WELL AS INFLATION, VOLUME OF BUSINESS, WAGE AND 
EMPLOYMENT LEVELS, AND SIMILAR ECONOMIC AND 
FINANCIAL FACTORS: PROVIDED, THAT THE SECRETARY OF 
FINANCE SHALL PROVIDE CLASSIFICATIONS FOR MICRO, 
SMALL, MEDIUM, AND LARGE TAXPAYERS AND INTRODUCE 
ADDITIONAL CLASSIFICATION OF TAXPAYERS AS MAY BE 
DEEMED NECESSARY AND REASONABLE TO ACHIEVE BETTER 
SERVICE AND TAX ADMINISTRATION: PROVIDED, FURTHER, 
THAT THE CLASSIFICATION OF TAXPAYERS SHALL TAKE INTO 
ACCOUNT THE TAXPAYERS' ANNUAL GROSS SALES, TOTAL 
ASSETS, AND NUMBER OF EMPLOYEES, AMONG OTHERS: 
PROVIDED, FURTHERMORE, THAT FOR EVERY CLASS OF 
TAXPAYERS, THE BUREAU OF INTERNAL REVENUE SHALL 
PROVIDE FOR A SPECIAL UNIT TO CATER TO THE NEEDS OF 
TAXPAYERS UNDER SUCH CLASSIFICATION: PROVIDED, 
FINALLY, THAT FOR EASE OF COMPLIANCE TO TAX LAWS, 
RULES, AND REGULATIONS, SIMPLIFIED TAX RETURNS AND 
PROCESSES SHALL BE IMPLEMENTED FOR TAXPAYERS 
CLASSIFIED AS MICRO AND SMALL TAXPAYERS."
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SEC. 4. Section 22 of the National Internal Revenue Code of 1997, as amended,
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is hereby further amended to read as follows:
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"SEC. 22. Definitions. — When used In this Title;


XXX
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(KK) THE TERM 'FILING OF RETURN' SHALL REFER TO
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THE ACT OF ACCOMPLISHING AND SUBMITTING THE
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PRESCRIBED TAX RETURN, ELECTRONICALLY OR MANUALLY,
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TO THE BUREAU OF INTERNAL REVENUE, OR THROUGH ANY
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AUTHORIZED AGENT BANK OR AUTHORIZED TAX SOFTWARE
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PROVIDER, AS REQUIRED UNDER THIS CODE OR AS
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PRESCRIBED UNDER EXISTING RULES AND REGULATIONS.
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(LL) THE TERM 'PAYMENT OF TAX' OR 'REMITTANCE OF
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TAX' SHALL REFER TO THE ACT OF DELIVERING THE AMOUNT
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OF TAX DUE OR WITHHELD, EITHER ELECTRONICALLY OR
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MANUALLY, TO THE BUREAU OF INTERNAL REVENUE, OR
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THROUGH ANY AUTHORIZED AGENT BANK OR AUTHORIZED
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TAX SOFTWARE PROVIDER, AS REQUIRED UNDER THIS CODE
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OR AS PRESCRIBED UNDER EXISTING RULES AND
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REGULATIONS."
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SEC. 5. Section 34 (K) of the National Internal Revenue Code of 1997,
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as amended, is repealed, and the succeeding paragraph is renumbered
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accordingly.
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SEC. 6. Section 51 of the National Internal Revenue Code of 1997, as amended,
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is hereby further amended to read as follows:
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"SEC. 51. Individual Returns. -
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XXX


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(B) Where to File, - Except in cases where the Commissioner
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otherwise permits, the return shall be filed with anY authorized agent
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bank, Revenue District Office[r,] THROUGH REVENUE Collection
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[Agent] OFFICER, OR AUTHORIZED TAX SOFTWARE PROVIDER
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[or duly authorized Treasurer of the city or municipality in which such
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person has his legal residence or principal place of business in the
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Philippines, or if there be no legal residence or place of business in the
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Philippines, with the Office of the Commissioner]."
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(D) Husband and Wife. - Married individuals, whether citizens,
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resident or nonresident aliens, who do not derive income purely from
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compensation, shall file, EITHER 
ELECTRONICALLY OR
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MANUALLY, a return for the taxable year to include the income of both
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spouses, but where it is impracticable for the spouses to file one return,
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each spouse may file a separate return of income but the returns so filed
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shall be consolidated by the Bureau for purposes of verification for the
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taxable year.
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XXX
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SEC. 7. Section 56 of the National Internal Revenue Code of 1997, as amended,
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is hereby further amended to read as follows:
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"SEC. 56. Payment and Assessment of Income Tax for
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Individuals and Corporations, -
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(A) Payment of Tax, -


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(1) In GeneraL - The total amount of tax imposed by this Title 
shall be paid, EITHER ELECTRONICALLY OR MANUALLY, by the
person subject thereto at the time the return is filed. In the case of 
tramp vessels, the shipping agents and/or the husbanding agents, and 
in their absence, the captains thereof are required to file the return 
herein provided and pay the tax due thereon before their departure. 
Upon failure of the said agents or captains to file the return and pay the 
tax, the Bureau of Customs is hereby authorized to hold the vessel and 
prevent its departure until proof of payment of the tax is presented or a 
sufficient bond is filed to answer for the tax due."
XXX
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SEC. 8. Section 57 of the National Internal Revenue Code of 1997, as amended,
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is hereby further amended to read as follows:
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"SEC. 57. Withholding of Tax at Source. -
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"(A) XXX
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"(B) XXX
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(C) Tax-free Covenant Bonds - x x x
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"The Department of Finance shall review, at least once every three (3) years,
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regulations and processes for the withholding of creditable tax under this Code, and
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direct the Bureau of Internal Revenue to amend rules and regulations for the same,
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should it be found during the review that the existing rules, regulations, and processes
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for the withholding of creditable tax under this Code adversely and materially impact
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the taxpayer[.]: PROVIDED, THAT IN THE EXERCISE OF HIS POWER TO
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CLASSIFY TAXPAYERS UNDER SECTION 21 (B), THE SECRETARY OF


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FINANCE, UPON RECOMMENDATION OF THE COMMISSIONER, IS ALSO
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AUTHORIZED TO DETERMINE TAXPAYERS WHO SHALL NOT BE REQUIRED
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TO WITHHOLD TAXES UNDER SUBSECTION (B) OF THIS SECTION."
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SEC. 9. Section 58 of the National Internal Revenue Code of 1997, as amended,
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Is hereby further amended to read as follows:
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"SEC. 58. Return and Payment of Taxes Withheld at
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Source. -
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(A) Quarterly Returns and Payments of Taxes
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Withheld. - Taxes deducted and withheld under Section 57 by
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withholding agents shall be covered by a return and paid to, EITHER
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ELECTRONICALLY OR MANUALLY, except in cases where the
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Commissioner otherwise permits, anY authorized agent bank. Revenue
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District Office[r,] THROUGH REVENUE Collection [Agent] OFFICER,
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OR AUTHORIZED TAX SOFTWARE PROVIDER [, or duly authorized
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Treasurer of the city or municipality where the withholding agent has
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his legal residence or principal place of business, or where the
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withholding agent is a corporation, where the principal office Is
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located]."
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(B) XXX
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(C) TIMING 
OF WITHHOLDING TAXES. - THE
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OBLIGATION TO DEDUCT AND WITHHOLD THE TAX ARISES AT
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THE TIME THE INCOME HAS BECOME PAYABLE.
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[(C)] (D) Annual Information Return. - X X X


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[(D)] (E) Income of Recipient. - Income upon which any 
creditable tax is required to be withheid at source under Section 57 shall 
be included in the return of its recipient but the excess of the amount 
of tax so withheld over the tax due on his return shall be refunded to 
him subject to the provisions of Section 204; if the income tax collected 
at source is less than the tax due on his return, the difference shall be 
paid in accordance with the provisions of Section 56.
CLAIMS FOR TAX CREDIT OR REFUND OF ANY 
CREDITABLE INCOME TAX WHICH WAS DEDUCTED AND 
WITHHELD ON INCOME PAYMENTS SHALL BE GIVEN DUE 
COURSE ONLY WHEN IT IS SHOWN THAT THE INCOME 
PAYMENT HAS BEEN DECLARED AS PART OF THE GROSS 
INCOME AND THE FACT WITHHOLDING IS ESTABLISHED. 
CLAIMS FOR TAX CREDIT OF ANY CREDITABLE INCOME TAX 
DEDUCTED AND WITHHELD IN A PREVIOUS PERIOD CAN STILL 
BE CREDITABLE IN THE SUBSEQUENT CALENDAR OR FISCAL 
YEAR.
All taxes withheld pursuant to the provisions of this Code and its 
implementing rules and regulations are hereby considered trust funds 
and shall be maintained in a separate account and not commingled with 
any other funds of the withholding agent.
[(E)] (F) Registration with Register of Deeds. - X X X
XXX


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SEC. 10. Section 76 of the National Internal Revenue Code of 1997, as
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amended, Is hereby amended to read as follows:
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"SEC 76. Final Adjustment Return. -XXX
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XXX
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In case the corporation is entitled to a tax credit or refund of the excess
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[estimated quarterly] income taxes paid DURING THE YEAR, the excess
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amount shown on its final adjustment return may be carried over and credited
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against the estimated quarterly income tax liabilities for the taxable quarters of
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the succeeding taxable years. Once the option to carry-over and apply the
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SAID excess [quarterly] income taxes PAID against THE income tax due for
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the taxable quarters of the succeeding taxable years has been made, such
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option shall be considered irrevocable for that taxable period and no application
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for cash refund or issuance of a tax credit certificate shall be allowed
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therefor[.]: PROVIDED, THAT, IN CASE THE TAXPAYER CANNOT CARRY
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OVER THE EXCESS INCOME TAX CREDIT DUE TO DISSOLUTION OR
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CESSATION OF BUSINESS, ANY UNUTILIZED EXCESS INCOME TAX
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CREDIT OF THE SAID TAXPAYER SHALL BE REFUNDED WITHIN TWO
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YEARS FROM THE DATE OF THE DISSOLUTION OR CESSATION OF
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BUSINESS.'7
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SEC. 11. Section 77 of the National Internal Revenue Code of 1997, as
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amended, is hereby amended to read as follows:
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"SEC. 77. Place and Time of Filing and Payment of
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Quarterly Corporate Income 
Tax. -


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(A) 
Place of Filing. - Except as the Commissioner otherwise 
permits, the quarterly income tax declaration required in Section 75 and 
the final adjustment return required in Section 76 shall be filed, EITHER 
ELECTRONICALLY OR MANUALLY, with [the] ANY authorized agent 
bank[s], [or] Revenue District Office[r or] THROUGH REVENUE 
Collection [Agent] OFFICER OR AUTHORIZED TAX SOFTWARE 
PROVIDER [or duly authorized Treasurer of the city or municipality 
having jurisdiction over the location of the principal office of the 
corporation filing the return or place where its main books of accounts 
and other data from which the return is prepared are kept].
(B) Time of Filing the Income Tax Return. - The corporate 
quarterly declaration shall be filed, EITHER ELECTRONICALLY OR 
MANUALLY, within sixty (60) days following the close of each of the 
first three (3) quarters of the taxable year. The final adjustment return 
shall be filed on or before the fifteenth (15th) day of April, or on or 
before the fifteenth (15th) day of the fourth (4th) month following the 
close of the fiscal year, as the case may be.
(C) Time of Payment of the Income Tax. - The income tax 
due on the corporate quarterly returns and the final adjustment income 
tax returns computed in accordance with Sections 75 and 76 shall be 
paid, EITHER ELECTRONICALLY OR MANUALLY, at the time the 
declaration or return is filed, in a manner prescribed by the 
Commissioner."
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SEC. 12. Section 81 of the National Internal Revenue Code of 1997, as
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amended, is hereby amended to read as follows:
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"SEC. 81. Filing of Return and Payment of Taxes
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Withheld. - Except as the Commissioner otherwise permits, taxes
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deducted and withheld by the employer on wages of employees shall be
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covered by a return and paid, EITHER ELECTRONICALLY OR
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MANUALLY, to anY authorized agent bank, REVENUE DISTRICT
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OFFICE THROUGH REVENUE Collection [Agent] OFFICER, or
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AUTHORIZED TAX SOFTWARE PROVIDER [the duly authorized
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Treasurer of the city or municipality where the employer has his legal
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residence or principal place of business, or in case the employer is a
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corporation, where the principal office is located]."
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The return shall be filed and the payment made, EITHER
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ELECTRONICALLY OR MANUALLY, within twenty-five (25) days
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from the close of each calendar quarter: Provided, however. That the
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Commissioner may, with the approval of the Secretary of Finance,
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require the employers to pay or deposit the taxes deducted and withheld
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at more frequent intervals, in cases where such requirement is deemed
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necessary to protect the interest of the Government.
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The taxes deducted and withheld by employers shall be held in a
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special fund in trust for the Government until the same are paid to the
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said collecting officers."
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SEC. 13. Section 90 of the National Internal Revenue Code of 1997, as
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amended, is hereby further amended to read as follows:
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'SEC. 90. Estate Tax Returns. -
XXX
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(D) Place of Filing. - Except in cases where the
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Commissioner otherwise permits, the return required under Subsection
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(A) shall be filed, EITHER ELECTRONICALLY OR MANUALLY, with
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anY authorized agent bank, [or] Revenue District Office[r,] THROUGH
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REVENUE Collection officer, OR AUTHORIZED TAX SOFTWARE
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PROVIDER [or duly authorized Treasurer of the city or municipality in
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which the decedent was domiciled at the time of his death, or if there
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be no legal residence in the Philippines, with the Office of the
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Commissioner]."
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SEC. 14. Section 91 of the National Internal Revenue Code of 1997, as
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amended, is hereby further amended to read as follows:
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"SEC. 91. Payment of Tax. -
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(A) Time of Payment. - The estate tax imposed by Section 84
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shall be paid, EITHER ELECTRONICALLY OR MANUALLY, at the
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time the return is filed by the executor, administrator, or the heirs."
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(D) Liability for Payment- The estate tax imposed by Section
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84 shall be paid, EITHER ELECTRONICALLY OR MANUALLY, by the
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executor or administrator before delivery to any beneficiary of his
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distributive share of the estate. Such beneficiary shall to the extent of
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his distributive share of the estate, be subsidiarily liable for the payment
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of such portion of the estate tax as his distributive share bears to the
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value of the total net estate.
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XXX
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SEC. 15. Section 103 of the National Internal Revenue Code of 1997, as
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amended, is hereby amended to read as follows:
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"SEC. 103. Filing of Return and Payment of Tax, -
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(A) XXX
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(B) Time and Place of Filing and Payment - The return of
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the donor required 
in this Section shall be filed, EITHER
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ELECTRONICALLY OR MANUALLY, within thirty (30) days after the
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date the gift is made, and the tax due thereon shall be paid, EITHER
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ELECTRONICALLY OR MANUALLY, at the time of filing. Except in
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cases where the Commissioner otherwise permits, the return shall be
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filed and the tax paid, EITHER ELECTRONICALLY OR MANUALLY,
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to anY authorized agent bank, [the] Revenue District Office[r,]
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THROUGH Revenue Collection Officer, or AUTHORIZED TAX
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SOFTWARE PROVIDER [duly authorized Treasurer of the city or
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municipality where the donor was domiciled at the time of the transfer,
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or If there be no legal residence in the Philippines, with the Office of the
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Commissioner. In the case of gifts made by a nonresident, the return
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may be filed with the Philippine Embassy or Consulate in the country
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where he is domiciled at the time of the transfer, or directly with the
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Office of the Commissioner]."
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SEC. 16. Section 106 of the National Internal Revenue Code of 1997, as
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amended, is hereby further amended to read as follows:
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''SEC. 106. Value-Added Tax on Sale of Goods or
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Properties. -
(A) Rate and Base of Tax -There shall be levied, assessed 
and collected on every sale, barter or exchange of goods 
or properties, a value-added tax equivalent to twelve 
percent (12%) of the gross [selling price or gross value in 
money] SALES of the goods or properties sold, bartered 
or exchanged, such tax to be paid by the seller or 
transferor.
(l)xxx
(a) XXX
(b) XXX
(c) xxx
(d) XXX
(e) XXX
FOR THE PURPOSES OF THIS SECTION, [T]The term gross 
[selling price] SALES' means the total amount of money or its 
equivalent which the purchaser pays or is obligated to pay to the 
seller in consideration of the sale, barter or exchange of the 
goods or properties, excluding the value-added tax. The excise 
tax, if any, on such goods or properties shall form part of the 
gross [selling price] SALES.
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(D) Sales Returns^ Allowances and Sales Discounts. -
The value of goods or properties sold and subsequently returned or for 
which allowances were granted by a VAT-registered person may be 
deducted from the gross sales [or receipts] for the quarter in which a 
refund is made or a credit memorandum or refund is issued. Sales 
discount granted and indicated in the invoice at the time of sale and 
the grant of which does not depend upon the happening of a future 
event may be excluded from the gross sales within the same quarter it 
was given.
(E) Authority of the Commissioner to Determine the 
Appropriate Tax Base. — The Commissioner shall, by rules and 
regulations prescribed by the Secretary of Finance, determine the 
appropriate tax base in cases where a transaction is deemed a sale, 
barter or exchange of goods or properties under Subsection (B) hereof, 
or where the gross [selling price] SALES is unreasonably lower than 
the actual market value."
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SEC. 17. Section 108 of the National Internal Revenue Code of 1997, as
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amended, is hereby further amended to read as follows:
"SEC. 108. Value-added Tax on Sale of Services and Use
or Lease of Properties. -
(A) Rate and Base of Tax. - There shall be levied, assessed 
and collected, a value-added tax equivalent to twelve percent (12%) of
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THE gross [receipts] SALES derived from the sale or exchange of 
services, including the use or lease of properties."
XXX
FOR PURPOSES OF THIS SECTION, [T]The term gross 
[receipts] SALES means the total amount of money or its equivalent 
representing the contract price, compensation, service fee, rental or 
royalty, including the amount charged for materials supplied with the 
services [and deposits and advanced payments actually or 
constructively received] during the taxable quarter for the services 
performed [or to be performed] for another person, WHICH THE 
PURCHASER PAYS OR IS OBLIGATED TO PAY TO THE SELLER 
IN CONSIDERATION OF THE SALE, BARTER, OR EXCHANGE OF 
SERVICES THAT HAS ALREADY BEEN RENDERED BY THE 
SELLER AND THE USE OR LEASE OF PROPERTIES THAT HAVE 
ALREADY BEEN SUPPLIED BY THE SELLER, excluding value-added
tax.
(B) 
Transactions Subject to Zero Percent (0%) Rate, —
XXX
(C) BAD DEBTS. - A SELLER OF SERVICES MAY DEDUCT THE 
PORTION OF VAT PERTAINING TO RECEIVABLES 
CONSIDERED AS BAD DEBTS, UPON SATISFACTION OF 
THE FOLLOWING CONDITIONS:
1) THE SELLER HAS FULLY PAID THE VAT ON THE 
SERVICES RENDERED;
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2) THE SELLER HAS NOT COLLECTED IN FULL THE
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AMOUNT PAYABLE TO HIM OR HER;
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3) THE RECEIVABLE IS CONSIDERED AS BAD DEBTS
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AND ACTUALLY ASCERTAINED TO BE WORTHLESS;
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AND
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4) THE BAD DEBT IS WRITTEN OFF.
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THE SELLER SHALL DEDUCT SUCH VAT PAID FROM
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THE VAT LIABILITY DURING THE YEAR WHEN THE BAD
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DEBTS ARE WRITTEN OFF. IN CASE OF RECOVERY OF BAD
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DEBTS PREVIOUSLY WRITTEN OFF, THE VAT PERTAINING
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TO THE BAD DEBTS RECOVERED SHALL BE ADDED TO THE
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VAT PAYABLE OF THE TAXPAYER IN THE YEAR OF
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RECOVERY.
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SEC. 18. Section 109 of the National Internal Revenue Code of 1997, as
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amended, is hereby further amended to read as follows:
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"SEC. 109. Exempt Transactions. -
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(1) Subject to the provisions of Subsection (2) hereof, the following
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transactions shall be exempt from the value-added tax:
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XXX
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(CC) Sale or lease of goods or properties or the performance of
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services other than the transactions mentioned in the preceding
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paragraphs, the gross annual sales [and/or receipts] do not exceed the
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amount of Three million pesos (P3,000,000)[.]: PROVIDED, THAT
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THE AMOUNT HEREIN STATED SHALL BE ADJUSTED TO ITS
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PRESENT VALUES USING THE CONSUMER PRICE INDEX, AS
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PUBLISHED BY THE PHILIPPINE STATISTICS AUTHORITY
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(PSA) EVERY THREE (3) YEARS.
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(2) A VAT-REGISTERED PERSON MAY ELECT THAT SUBSECTION
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(1) NOT APPLY TO ITS SALE OF GOODS OR PROPERTIES OR
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SERVICES: PROVIDED, THAT AN ELECTION MADE UNDER THIS
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SUBSECTION SHALL BE IRREVOCABLE FOR A PERIOD OF THREE
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(3) YEARS FROM THE QUARTER THE ELECTION WAS MADE.
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SEC. 19. Section 110 of the National Internal Revenue Code of 1997, as
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amended, is hereby further amended to read as follows:
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"SEC. 110. Tax Credits,—
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(A) Creditable Input Tax, -
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(1) Any input tax evidenced by a VAT invoice [or official receipt]
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issued in accordance with Section 113 hereof on the following
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transactions shall be creditable against the output tax:
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(a) Purchase or importation of goods:
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(i) For sale; or
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(ii) For conversion into or intended to form part of a
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finished product for sale including packaging materials;
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or
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(iii) For use as supplies in the course of business; or
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(iv) For use as materials supplied in the sale of service;
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or
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(v) For use in trade or business [for which deduction 
for depreciation or amortization is aiiowed under this 
Code].
(b) Purchase of services on which a value-added tax has 
been [actually paid] ACCRUED."
XXX
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SEC. 20. Section 112 of the National Internal Revenue Code of 1997, as
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amended, is hereby further amended to read as follows:
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"SEC. 112. Refunds [or Tax Credits] of Input Tax, —
XXX
(B) Cancellation of VAT Registration. - A person whose 
registration has been cancelled due to retirement from or cessation of 
business, or due to changes in or cessation of status under Section 
106(C) of this Code may, within two (2) years from the date of 
cancellation, apply for the issuance of a tax credit certificate or CASH 
refund for any unused input tax which may be used in payment of his 
other internal revenue taxes OR APPLY FOR REFUND FOR ANY 
UNUSED INPUT TAX.
(C) Period within which THE Refund [or tax credit] of 
Input Taxes shall be Made, - In proper cases, the Commissioner 
shall grant a refund for creditable input taxes within ninety (90) days 
from the date of submission of [the official receipt or] ALL invoices and 
other documents in support of the application filed in accordance with 
Subsections (A) and (B) hereof: PROVIDED, THAT FOR THIS
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PURPOSE, THE VAT REFUND CLAIMS SHALL BE CLASSIFIED 
INTO LOW-, MEDIUM-, AND HIGH-RISK CLAIMS, WITH THE 
RISK CLASSIFICATION BASED ON AMOUNT OF VAT REFUND 
CLAIM, TAX COMPLIANCE HISTORY, FREQUENCY OF FILING 
VAT REFUND CLAIMS, AMONG OTHERS; PROVIDED, FURTHER, 
THAT MEDIUM- AND HIGH-RISK CLAIMS SHALL BE SUBJECT TO 
AUDIT OR OTHER VERIFICATION PROCESSES IN ACCORDANCE 
WITH THE BIR'S NATIONAL AUDIT PROGRAM FOR THE 
RELEVANT YEAR: Provided, FINALLY, That should the Commissioner 
find that the grant of refund is not proper, the Commissioner must state 
in writing the legal and factual basis for the denial WITHIN THE 
NINETY (90)-DAY PERIOD.
In case of full or partial denial of the claim for tax refund, OR 
THE FAILURE ON THE PART OF THE COMMISSIONER TO ACT ON 
THE APPLICATION WITHIN THE PERIOD PRESCRIBED ABOVE,
the taxpayer affected may, within thirty (30) days from the receipt of 
the decision denying the claim OR AFTER THE EXPIRATION OF THE 
NINETY (90)-DAY PERIOD, appeal the decision with the Court of Tax 
Appeals: Provided, however. That failure on the part of any official, 
agent, or employee of the BIR to act on the application within the ninety 
(90)-day period shall be punishable under Section 269 of this Code.
(D) Manner of Giving Refund, - Refunds shall be made upon 
warrants drawn by the Commissioner or by his duly authorized 
representative without the necessity of being countersigned by the
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Chairman, Commission on Audit, the provisions of the Administrative
2 
Code of 1987 to the contrary notwithstanding: Provided, That refunds
3 
under this paragraph shall be subject to post audit by the Commission
4 
on Audit FOLLOWING THE RISK-BASED CLASSIFICATION
5 
ABOVE-DESCRIBED."
6 
XXX
7 
SEC. 21. Section 113 of the National Internal Revenue Code of 1997, as
8 
amended, is hereby amended to read as follows:
9 
"SEC. 113. Invoicing and Accounting Requirements for
10 
144 T-Registered Persons. —
11 
(A) Invoicing Requirement[s]. — A VAT-registered person
12 
shall issue [t
13 
(1)] A VAT invoice for every sale, barter, [or] exchange, OR
14 
LEASE of goods or properties [; and
15 
(2) A VAT official receipt for every lease of goods or properties],
16 
and for every sale, barter or exchange of services."
17 
(B) Information Contained in the VAT Invoice [or 
VAT
18 
OfficiaiReceipf\. — The following information shall be indicated in the
19 
VAT invoice [or VAT official receipt]:
20 
(1) A statement that the seller is a VAT-registered person,
21 
followed by [his] THE SELLER'S Taxpayer's Identification Number
22 
(TIN);
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(2) The total amount which the purchaser pays or is obligated to 
pay to the seller with the indication that such amount includes the value- 
added tax: Provided, That:
(a) The amount of the tax shall be shown as a separate Item in 
the invoice [or receipt];
(b) If the sale is exempt from value-added tax, the term VAT- 
exempt sale' shall be written or printed [prominently] on the invoice [or 
receipt];
(c) If the sale is subject to zero percent (0%) value-added tax, 
the term 'zero-rated sale' shall be written or printed [prominently] on 
the invoice [or receipt];
(d) If the sale involves goods, properties or services some of 
which are subject to and some of which are VAT zero-rated or VAT- 
exempt, the invoice [or receipt] shall clearly indicate the break-down of 
the sale price between its taxable, exempt and zero-rated components, 
and the calculation of the value-added tax on each portion of the sale 
shall be shown on the invoice [or receipt]: Provided, That the seller may 
issue separate invoices [or receipts] for the taxable, exempt, and zero­
rated components of the sale.
(3) X X X
(4) In the case of sales in the amount of One thousand pesos 
(P1,000) or more where the sale or transfer is made to a VAT-registered 
person, the name, [business style, if any,] address and Taxpayer 
Identification Number (TIN) of the purchaser, customer or client.
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(C) XXX
(D) Consequence of Issuing AN Erroneous VA T Invoice [or
VA T Official Receipt. —
(1) If a person who is not a VAT-registered person issues an 
invoice [or receipt] showing [his] THE PERSON'S Taxpayer 
Identification Number (TIN), followed by the word 'VAT':
(a) The issuer shall, in addition to any liability to other percentage 
taxes, be liable to:
(1) The tax imposed in Section 106 or 108 without the benefit of 
any input tax credit; and
(ii) A fifty percent (50%) surcharge under Section 248 (B) of this
Code;
(b) The VAT shall, if the other requisite information required 
under Subsection (B) hereof is shown on the invoice [or receipt], be 
recognized as an input tax credit to the purchaser under Section 110 of 
this Code.
(2) If a VAT-registered person issues a VAT invoice [or VAT 
official receipt] for a VAT-exempt transaction, but fails to display 
[prominently] on the invoice [or receipt] the term 'VAT-exempt sale',
OR CLEARLY PROVIDE A BREAKDOWN OF THE VAT-EXEMPT 
SALE AS PROVIDED FOR UNDER PARAGRAPH B (2) (D) HEREIN,
the issuer shall be liable to account for the tax imposed in Section 106 
or 108 as if Section 109 did not apply.
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(3) IF A VAT-REGISTERED PERSON ISSUES A VAT-
2 
INVOICE TO ANOTHER VAT-REGISTERED PERSON WITH
3 
LACKING INFORMATION REQUIRED UNDER SUBSECTION (B)
4 
HEREOF, THE ISSUER SHALL BE LIABLE FOR NON-COMPLIANCE
5 
WITH THE INVOICING REQUIREMENT, HOWEVER, THE VAT
6 
SHALL STILL BE ALLOWED TO BE USED AS INPUT TAX CREDIT
7 
ON THE PART OF THE PURCHASER PURSUANT TO SECTION 110
8 
OF THIS CODE IF THE LACKING INFORMATION DO NOT
9 
PERTAIN TO THE AMOUNT OF SALES, AMOUNT OF VAT, NAME
10 
AND TIN OF BOTH THE PURCHASER AND ISSUER/SELLER, AND
11 
THE DATE OF THE TRANSACTION.
12 
SEC. 22. Section 114 of the National Internal Revenue Code of 1997, as
13 
amended, is hereby further amended to read as follows:
14 
"SEC. 114. Return and Payment of Value-Added Tax. -
15 
(A) In General. — Every person liable to pay the value-added
16 
tax imposed under this Title shall file, EITHER ELECTRONICALLY OR
17 
MANUALLY, a quarterly return of the amount of his gross sales [or
18 
receipts] within twenty-five (25) days following the close of each taxable
19 
quarter prescribed for each taxpayer: Provided, however, That VAT-
20 
registered persons shall pay, EITHER ELECTRONICALLY OR
21 
MANUALLY, the value-added tax on a monthly basis: Provided, finaiiy,
22 
That beginning January 1, 2023, the filing and payment required under
23 
this Subsection shall be done within twenty-five (25) days following the
24 
close of each taxable quarter.
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XXX
2 
(B) Where to File the Return and Pay the Tax. - Except
3 
as the Commissioner otherwise permits, the return shall be filed with
4 
and the tax paid, EITHER ELECTRONICALLY OR MANUALLY, to anY
5 
authorized agent bank, REVENUE DISTRICT OFFICE THROUGH
6 
Revenue Collection Officer, OR AUTHORIZED TAX SOFTWARE
7 
PROVIDER [or duly authorized city or municipal Treasurer in the
8 
Philippines located within the revenue district where the taxpayer is
9 
registered or required to register]."
10 
XXX
11 
SEC. 23. Section 115 of the National Internal Revenue Code of 1997, as
12 
amended, is hereby amended to read as follows:
13 
"SEC. 115. Power of the Commissioner to Suspend the
14 
Business Operations of a Taxpayer. — The Commissioner or his
15 
authorized representative is hereby empowered to suspend the business
16 
operations and temporarily close the business establishment of any
17 
person for any of the following violations:
18 
(a) In the case of a VAT-registered Person. —
19 
(1) Failure to issue [receipts or] invoices;
20 
(2) Failure to file a value-added tax return as required under
21 
Section 114; or
22 
(3) Understatement of taxable sales [or receipts] by thirty
23 
percent (30%) or more of his correct taxable sales [or receipts] for the
24 
taxable quarter.
25


XXX
2 
SEC. 24. Section 116 of the National Internal Revenue Code of 1997, as
3 
amended, is hereby further amended to read as follows:
4 
"SEC. 116. Tax on Persons Exempt from Value-Added Tax
5 
(VAT).-kx\y person whose sales [or receipts] are exempt under
6 
Section 109 (CC) of this Code from the payment of value-added tax and
7 
who is not a VAT-registered person shall pay EITHER
8 
ELECTRONICALLY OR MANUALLY, a tax equivalent to three percent
9 
(3%) of his gross quarterly sales [or receipts]; Provided, That
10 
cooperatives, shall be exempt from the three percent (3%) gross
11 
receipts tax herein imposed."
12 
SEC. 25. Section 117 of the National Internal Revenue Code of 1997, as
13 
amended, is hereby further amended to read as follows:
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"SEC. 117. Percentage Tax on Domestic Carriers and 
Keepers of Garages. — Cars for rent or hire driven by the lessee; 
transportation contractors, including persons who transport passengers 
for hire, and other domestic carriers by land for the transport of 
passengers (except owners of bancas and owners of animal-drawn two 
wheeled vehicle), and keepers of garages shall pay a tax equivalent to 
three percent (3%) of their quarterly gross [receipts] SALES.
The gross [receipts] SALES of common carriers derived from 
their incoming and outgoing freight shall not be subjected to the local 
taxes imposed under Republic Act No. 7160, otherwise known as the 
Local Government Code of 1991.
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[In computing the percentage tax provided in this Section, the 
following shall be considered the minimum quarterly gross receipts in 
each particular case:
Jeepney for hire -
1. Manila and other cities 
P2,400
2. Provincial 
1,200
Public utility bus -
Not exceeding 30 passengers 
P3,600
Exceeding 30 but not exceeding 50 passengers 6,000 
Exceeding 50 passengers 
7,200
Taxis -
1. Manila and other cities
2. Provincial
Car for hire (with chauffeur)
Car for hire (without chauffeur)
P3,600 
2,400 
P3,000 
1, 800]
SEC. 26. Section 118 of the National Internal Revenue Code of 1997, as 
amended, is hereby further amended to read as follows:
"SEC. 118. Percentage Tax on International Carriers. —
(A) International air carriers doing business in the Philippines on 
their gross [receipts] SALES derived from transport of cargo 
from the Philippines to another country shall pay a tax of three 
percent (3%) of their quarterly gross [receipts] SALES.
(B) International shipping carriers doing business in the 
Philippines on their gross [receipts] SALES derived from
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transport of cargo from the Philippines to another country shall
2 
pay a tax equivalent to three percent (3%) of their quarterly
3 
gross [receipts] SALES.
4 
SEC. 27. Section 119 of the National Internal Revenue Code of 1997, as
5 
amended, is hereby further amended to read as follows:
6 
"SEC. 119. Tax on Franchises. — Any provision of general or
7 
special law to the contrary notwithstanding, there shall be levied,
8 
assessed and collected in respect to all franchises on radio and/or
9 
television broadcasting companies whose annual gross [receipts]
10 
SALES of the preceding year do not exceed Ten million pesos
11 
(P10,000,000), subject to Section 236 of this Code, a tax of three
12 
percent (3%) and on gas and water utilities, a tax of two percent (2%)
13 
on the gross [receipts] SALES derived from the business covered by
14 
the law granting the franchise: Provided, however, That radio and
15 
television broadcasting companies referred to in this Section shall have
16 
an option to be registered as a value-added taxpayer and pay the tax
17 
due thereon: Provided, further. That once the option is exercised, said
18 
option shall be irrevocable.
19 
XXX
20 
SEC. 28. Section 120 of the National Internal Revenue Code of 1997, as
21 
amended, is hereby further amended to read as follows:
22 
"SEC. 120. Tax on Overseas Dispatch, Message or
23 
Conversation Originating from the Phiiippines. —
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to:
(A) Persons Liable. — There shall be collected upon every 
overseas dispatch, message or conversation transmitted 
from the Philippines by telephone, telegraph, telewriter 
exchange, wireless and other communication equipment 
services, a tax of ten percent (10%) on the amount [paid] 
BILLED for such services. The tax imposed in this Section 
shall be payable by the person paying for the services 
rendered and shall be paid to the person rendering the 
services who is required to collect and pay the tax within 
twenty (20) days after the end of each quarter.
(B) Exemptions. — The tax imposed by this Section shall not apply
(1) Government. — Amounts [paid] BILLED for messages 
transmitted by the Government of the Republic of the Philippines 
or any of its political subdivisions or instrumentalities;
(2) Diplomatic Services. — Amounts [paid] BILLED for 
messages transmitted by any embassy and consular offices of a 
foreign government;
(3) 
International Organizations. — Amounts [paid] 
BILLED for messages transmitted by a public international 
organization or any of its agencies based in the Philippines 
enjoying privileges, exemptions and immunities which the 
Government of the Philippines is committed to recognize pursuant 
to an international agreement; and
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(4) News Services. — Amounts [paid] BILLED for 
messages from any newspaper, press association, radio or 
teievision newspaper, broadcasting agency, or newstickers 
services, to any other newspaper, press association, radio or 
teievision newspaper broadcasting agency, or newsticker service 
or to a bona fide correspondent, which messages deai exciusiveiy 
with the coliection of news items for, or the dissemination of news 
item through, public press, radio or television broadcasting or a 
newsticker service furnishing a general news service similar to that 
of the public press.
SEC. 29. Section 128 of the Nationai Internal Revenue Code of 1997, as
12 amended, is hereby amended to read as foilows:
"SEC. 128. Returns and Payment of Percentage Taxes. -
(A) Returns of Gross Sales, Receipts or Earnings and Payment of 
Tax. -
(1) Persons Liable to Pay Percentage Taxes. - Every person 
subject to the percentage taxes imposed under this Title shall file,
EITHER ELECTRONICALLY OR MANUALLY, a quarterly return of the 
amount of [his] THE PERSON'S gross sales, receipts or earnings and 
pay, EITHER ELECTRONICALLY OR MANUALLY, TO ANY 
AUTHORIZED AGENT BANK, REVENUE DISTRICT OFFICE 
THROUGH REVENUE COLLECTION OFFICER, OR AUTHORIZED 
TAX SOFTWARE PROVIDER, the tax due thereon within twenty-five 
(25) days after the end of each taxabie quarter: Provided, That in the
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case of a person whose VAT registration is cancelled and who becomes 
liable to the tax imposed in Section 116 of this Code, the tax shall accrue 
from the date of cancellation and shall be paid in accordance with the 
provisions of this Section.
(2) Person Retiring from Business. - Any person retiring from a 
business subject to percentage tax shall notify the nearest internal 
revenue officer, file, EITHER ELECTRONICALLY OR MANUALLY,
[his] THE PERSON'S return and pay, EITHER ELECTRONICALLY 
OR MANUALLY the tax due thereon within twenty (20) days after 
closing [his] THE business.
XXX
(B) Where to File. - Except as the Commissioner otherwise 
permits, every person liable to the percentage tax under this Title [may, 
at his option,] SHALL file EITHER ELECTRONICALLY OR 
MANUALLY, a [separate return for each branch or place of business, 
or] consolidated return for all branches or places of business with [the]
ANY authorized agent bank. Revenue District Office[r,] THROUGH 
REVENUE Collection OFFICER, OR AUTHORIZED TAX SOFTWARE 
PROVIDER [Agent or duly authorized Treasurer of the city or 
municipality where said business or principal place of business is located, 
as the case may be]/'
SEC. 30. Section 200 of the National Internal Revenue Code of 1997, as
23 amended, is hereby amended to read as follows:
24
"SEC, 200, Payment of Documentary Stamp Tax. -
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(A) In General. — The provisions of Presidential Decree No. 
1045 notwithstanding, any person liable to pay documentary stamp tax 
upon any document subject to tax under Title VII of this Code shall file 
a tax return, EITHER ELECTRONICALLY OR MANUALLY, and pay, 
EITHER ELECTRONICALLY OR MANUALLY, the tax in accordance 
with the rules and regulations to be prescribed by the Secretary of 
Finance, upon recommendation of the Commissioner.
(B) Time for Filing and Payment of the Tax. - Except as 
provided by rules and regulations promulgated by the Secretary of 
Finance, upon recommendation of the Commissioner, the tax return 
prescribed in this Section shall be filed, EITHER ELECTRONICALLY 
OR MANUALLY, within ten (10) days after the close of the month when 
the taxable document was made, signed, issued, accepted, or 
transferred, and the tax thereon shall be paid, EITHER 
ELECTRONICALLY OR MANUALLY, at the same time the aforesaid 
return is filed.
(C) Where to File. - Except in cases where the Commissioner 
otherwise permits, the aforesaid tax return shall be filed, EITHER 
ELECTRONICALLY OR MANUALLY, with and the tax due shall be 
paid, EITHER ELECTRONICALLY OR MANUALLY, through [the] 
ANY authorized agent bank [within the territorial jurisdiction of the]. 
Revenue District Office THROUGH REVENUE COLLECTION 
OFFICER, OR AUTHORIZED TAX SOFTWARE PROVIDER [which 
has jurisdiction over the residence or principal place of business of the
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taxpayer. In places where there is no authorized agent bank, the return 
shall be filed with, or duly authorized Treasurer of the city or municipality 
in which the taxpayer has his legal residence or principal place of 
business].
XXX
SEC. 31. Section 204 of the National Internal revenue Code of 1997, as 
amended, is hereby further amended to read as follows:
"SEC. 204. Authority of the Commissioner to Compromise,^ 
Abate and Refund or Credit Taxes, -
The Commissioner may -
XXX
(C) Credit or refund taxes erroneously or illegally received or 
penalties imposed without authority, refund the value of internal 
revenue stamps when they are returned in good condition by the 
purchaser, and, in his discretion, redeem or change unused stamps that 
have been rendered unfit for use and refund their value upon proof of 
destruction. No credit or refund of taxes or penalties shall be allowed 
unless the taxpayer files in writing with the Commissioner a claim for 
credit or refund within two (2) years after the payment of the tax or 
penalty: Provided, however, That a return filed showing an 
overpayment shall be considered as a written claim for credit or refund: 
PROVIDED, FURTHER THAT THE COMMISSIONER SHALL 
PROCESS THE REFUND UNDER THIS PROVISION WITHIN ONE 
HUNDRED FIFTY (150) DAYS FROM DATE OF SUBMISSION OF
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COMPLETE DOCUMENTS IN SUPPORT OF THE APPLICATION 
FILED: PROVIDED, FURTHERMORE, THAT SHOULD THE 
COMMISSIONER DENY, IN FULL OR IN PART, THE CLAIM FOR 
REFUND, THE COMMISSIONER SHALL STATE THE LEGAL 
AND/OR FACTUAL BASIS FOR THE DENIAL: PROVIDED 
FINALLY, THAT FAILURE ON THE PART OF ANY OFFICIAL, 
AGENT, OR EMPLOYEE OF THE BIR TO ACT ON THE 
APPLICATION WITHIN ONE HUNDRED FIFTY (150) DAY 
PERIOD SHALL BE PUNISHABLE UNDER SECTION 269 OF THIS 
CODE.
A Tax Credit Certificate validly issued under the provisions of this 
Code may be applied against any internal revenue tax, excluding 
withholding taxes, for which the taxpayer is directly liable. Any request 
for conversion into refund of unutilized tax credits may be allowed, 
subject to the provisions of Section 230 of this Code: Provided, That the 
original copy of the Tax Credit Certificate showing a creditable balance 
is surrendered to the appropriate revenue officer for verification and 
cancellation: Provided, further. That in no case shall a tax refund be 
given resulting from availment of incentives granted pursuant to special 
laws for which no actual payment was made."
XXX
22 
SEC. 32. Section 236 of the National Internal Revenue Code of 1997, as
23 
amended, is hereby further amended to read as follows:
24 
"SEC. 236. Registration Requirements. -
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(A) Requirements. - Every person subject to any internal 
revenue tax shall register once, EITHER ELECTRONICALLY OR 
MANUALLY, with the appropriate Revenue District Office[r]:
(1) Within ten (10) days from date of employment, or
(2) On or before the commencement of business, or
(3) Before payment of any tax due, or
(4) Upon filing of a return, statement or declaration as required
in this Code.
The registration shall contain the taxpayer's name, [style,] place of 
residence, business, and such other information as may be required by 
the Commissioner in the form prescribed therefor: Provided, THAT THE 
COMMISSIONER SHALL ENSURE THE AVAILABILITY OF 
REGISTRATION FACILITIES TO ALL TAXPAYERS INCLUDING 
THOSE WHO ARE NOT RESIDING IN THE COUNTRY: PROVIDED, 
FURTHER, That the Commissioner shall simplify the business 
registration and tax compliance requirements of self-employed 
individuals and/or professionals.
XXX
[(B) Annual Registration Fee. - An annual registration fee in the 
amount of Five hundred pesos (PhPSOO) for every separate or distinct 
establishment or place of business, including facility types where sales 
transactions occur, shall be paid upon registration and every year 
thereafter on or before the last day of January: Provided, however. That 
cooperatives, individuals earning purely compensation income, whether
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locally or abroad, and overseas workers are not liable to the registration 
fee herein imposed.
The registration fee shall be paid to an authorized agent bank 
located within the revenue district, or to the Revenue Collection Officer, 
or duly authorized Treasurer of the city or municipality where each place 
of business or branch is registered.]
[(C)] (B) Registration of Each Type of Internal Revenue 
Tax. - Every person who is required to register with the Bureau of 
Internal Revenue under Subsection (A) hereof, shall register each type 
of internal revenue tax for which he is obligated, shall file a return,
EITHER ELECTRONICALLY OR MANUALLY, and shall pay, 
EITHER ELECTRONICALLY OR MANUALLY, such taxes, and shall 
update[s] such registration of any changes in accordance with 
Subsection [(E)] (D) hereof.
[(D)] (C) Transfer of Registration. — In case a registered 
person decides to transfer THE[his] place of business or [his] head 
office or branches, it shall be THE PERSON'S [his] duty to update 
THE[his] registration status by MERELY filing, EITHER 
ELECTRONICALLY OR MANUALLY, an application for registration 
information update in the form prescribed therefor; PROVIDED, 
HOWEVER, THAT IF THE TRANSFERING REGISTERED 
PERSON IS SUBJECT OF AN AUDIT INVESTIGATION, THE 
REVENUE DISTRICT OFFICE WHERE SUCH PERSON IS TO 
TRANSFER SHALL CONTINUE THE SAME: PROVIDED,
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FINALLY, THE TRANSFER OF AUDIT INVESTIGATION SHALL 
NOT BE ALLOWED IF IT IS DETERMINED AS A PRESCRIBING 
CASE."
[(E)] (D) Other Updates. - x x x 
[(F)] (E) Cancellation of Registration. -
(1) General Rule.- Ihe registration of any person [who 
ceases to be liable to a tax type] shall be cancelled upon MERE 
filing, EITHER ELECTRONICALLY OR MANUALLY, with the 
Revenue District Office where he is registered an application for 
registration information update in a form prescribed therefor. 
HOWEVER, THIS SHALL NOT PRECLUDE THE 
COMMISSSIONER OF THE INTERNAL REVENUE OR HIS 
AUTHORIZED REPRESENTATIVE FROM CONDUCTING AN 
AUDIT IN ORDER TO DETERMINE ANY TAX LIABILITY;
(2) Cancellation of Value-Added Tax Registration. 
- A VAT- registered person may cancel [his] THE registration for 
VAT if:
(a) [He]THE PERSON makes A written OR AN 
ELECTRONIC application and can demonstrate to the 
Commissioner's satisfaction that [his] THE gross sales or receipts 
for the following twelve (12) months, other than those that are 
exempt under Section 109 (A) to ([U]CC), will not exceed [One 
million five hundred thousand] THE THRESHOLD AS 
PROVIDED IN SECTION 109(CC); or
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(b) [He] THE PERSON has ceased to carry on [his] THE 
trade or business, and does not expect to recommence any trade 
or business within the next (12) months.
The cancellation of registration will be effective from the 
first day of the following month.
[(G)] (F) Persons Required to Register for Value-Added 
Tax. —
(1) Any person who, in the course of trade or business, sells, 
barters or exchanges goods or properties, or engages in the sale 
or exchange of services, shall be liable to register, EITHER 
ELECTRONICALLY OR MANUALLY, for value-added tax if:
(a) [His]THE PERSON'S gross sales [or receipts] for the past 
twelve (12) months, other than those that are exempt under 
Section 109(A) to ([BB]CC), have exceeded [Three million pesos 
(P3,000,000)] THE THRESHOLD AS PROVIDED IN SECTION 
109(CC);
(b) There are reasonable grounds to believe that [his] 
THE gross sales [or receipts] for the next twelve (12) months, 
other than those that are exempt under Section 109(A) to 
([BB]CC), will exceed [Three million pesos (P3,000,000)] THE
THRESHOLD AS PROVIDED IN SECTION 109 (CC).
(2) Every person who becomes liable to be registered 
under paragraph (1) of this Subsection shall register, EITHER 
ELECTRONICALLY OR MANUALLY, with the APPROPRIATE
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Revenue District Office, AS DETERMINED BY THE 
COMMISSIONER [which has jurisdiction over the head office or 
branch of that person, and shail pay the annual registration fee 
prescribed in Subsection (B) hereof]. If he fails to register, he 
shall be liable to pay the tax under Title IV as if he were a VAT- 
registered person, but without the benefit of input tax credits for 
the period in which he was not properly registered.
[(H)] (G) Optional Registration for Value-Added Tax of 
Exempt Person. -
(1) Any person who is not required to register for value- 
added tax under Subsection [(G)] (F) hereof may elect to 
register, EITHER ELECTRONICALLY OR MANUALLY, for
value-added tax [by registering] with the Revenue District Office 
that has a jurisdiction over the head office of that person. [, and 
paying the annual registration fee in Subsection (B) hereof.]
(2) Any person who elects to register under this Subsection 
shall not be entitled to cancel his registration under Subsection 
[(F)] (E)(2) for the next three (3) years.
XXX
For purposes of Title IV of this code, any person who has 
registered value-added tax as a tax type in accordance with the 
provisions of Subsection ([C]B) hereof shall be referred to as a 
"VAT-registered person" who shall be assigned only one Taxpayer 
Identification Number (TIN).
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[(I)] (H) Supplying of Taxpayer Identification Number 
(TIN). -
Any person required under the authority of this Code to 
make, render or file a return, statement or other document shall 
be supplied with or assigned a Taxpayer Identification Number 
(TIN) which [he] THE PERSON shall indicate in such return, 
statement or document filed, EITHER ELECTRONICALLY OR 
MANUALLY, with the Bureau of Internal Revenue for [his] 
proper identification for tax purposes, and which [he] THE 
PERSON shall Indicate in certain documents, such as, but not 
limited to the following:
XXX
In cases where a registered taxpayer dies, the administrator 
or executor shall register, EITHER ELECTRONICALLY OR 
MANUALLY, the estate of the decedent in accordance with 
Subsection (A) hereof and a new Taxpayer Identification Number 
(TIN) shall be supplied in accordance with the provisions of this 
Section.
In the case of a nonresident decedent, the executor or 
administrator of the estate shall register, EITHER 
ELECTRONICALLY OR MANUALLY, the estate with the 
Revenue District Office where [he] THE EXECUTOR OR 
ADMINISTRATOR Is registered: Provided, however, That in 
case such executor or administrator is not registered, registration
40


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of the estate shall be made with the Taxpayer Identification
2 
Number (TIN) supplied by the Revenue District Office having
3 
jurisdiction over THE EXECUTOR OR ADMINISTRATOR'S
4 
legal residence.
5 
X X x"
6 
SEC. 33. Section 237 of the National Internal Revenue Code of 1997, as
7 
amended, is hereby further amended to read as follows:
8 
"SEC. 237. Issuance of [Receipts or] Safes or Commercial
9 
Invoices, -
10 
(A) Issuance, — All persons subject to an internal revenue tax
11 
shall, at the point of each saie and transfer of merchandise or for
12 
services rendered valued at One hundred pesos (PhPlOO.OO) or more,
13 
issue duly registered [receipts or] sale or commercial Invoices, showing
14 
the NAME, TAXPAYER IDENTIFICATION NUMBER (TIN), date of
15 
transaction, quantity, unit cost and description of merchandise or nature
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Of service: PROVIDED, THAT THE AMOUNT HEREIN STATED
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SHALL BE ADJUSTED TO ITS PRESENT VALUES EVERY THREE
18 
(3) YEARS USING THE CONSUMER PRICE INDEX, AS
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PUBLISHED BY THE PHILIPPINE STATISTICS AUTHORITY
20 
(PSA): Provided, however, That [where the receipt is issued to cover
21 
payment made as rentals, commissions, compensation or fees, receipts
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or invoices shall be issued which shall show the name, business style, if
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any, and address of the purchaser, customer or client:] IF THE SALES
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AMOUNT PER TRANSACTION IS BELOW THE THRESHOLD, THE
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SELLER WILL ISSUE ONE (1) INVOICE FOR THE AGGREGATE 
SALES AMOUNT FOR SUCH SALES AT THE END OF THE DAY 
EXCEPT WHEN THE BUYER REQUIRES THE ISSUANCE OF SALES 
OR COMMERCIAL INVOICE FOR PURPOSES OF 
SUBSTANTIATING CLAIMS FOR ALLOWABLE EXPENSES: 
Provided, further. That [where the purchaser is a VAT-registered 
person, in addition to the information herein required, the invoice or 
receipt shall further show the Taxpayer Identification Number (TIN) of 
the purchaser.] VAT-REGISTERED PERSONS SHALL ISSUE DULY 
REGISTERED SALE OR COMMERCIAL INVOICES REGARDLESS 
OF THE AMOUNT OF THE SALE AND TRANSFER OF 
MERCHANDISE OR FOR SERVICES RENDERED."
XXX
SEC. 34. Section 241 of the National Internal Revenue Code of 1997, as 
amended, is hereby amended to read as follows:
"SEC. 241. Exhibition of Certificate of Payment at Piace of 
Business. - The certificate or receipts showing payment of taxes issued to a 
person engaged in [a] business [subject to an annual registration fee] shall be 
kept conspicuously exhibited in plain view in or at the place where the business 
is conducted; and in case of a peddler or other persons not having a fixed place 
of business, shall be kept in the possession of the holder thereof, subject to 
production upon demand of any internal revenue officer."
SEC. 35. Section 242 of the National Internal Revenue Code of 1997, as 
amended, is hereby amended to read as follows:
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"SEC. 242. Continuation of Business of Deceased Person, - When 
any individual who has [paid the annual registration fee] REGISTERED A 
BUSINESS dies, and the same business is continued by the person or persons 
interested in his estate, no additional payment shall be required for the residue 
of the term which the tax was paid: Provided, however. That the person or 
persons interested in the estate should, within thirty (30) days from the death 
of the decedent, submit to the Bureau of Internal Revenue or the Regional or 
Revenue District Office inventories of goods or stocks had at the time of such 
death.
The requirement under this Section shall also be applicable in the case 
of transfer of ownership or change of name of the business establishment." 
SEC. 36. Section 243 of the National Internal Revenue Code of 1997, as
13 amended, is hereby amended to read as follows:
"SEC. 243. Removal of Business to Other Location. - Any 
REGISTERED business [for which the annual registration fee has been paid] 
may, subject to the rules and regulations prescribed by the Secretary of 
Finance, upon recommendation of the Commissioner, be removed and 
continued in any other place without the payment of additional tax during the 
term for which the payment was made."
SEC. 37. Section 245 of the National Internal Revenue Code of 1997, as
21 amended, is hereby amended to read as follows:
22
23
"SEC. 245. Specific Provisions to be Contained in Rules 
and Regulations. — The rules and regulations of the Bureau of
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Internal Revenue shall, among other things, contain provisions 
specifying, prescribing or defining:
XXX
"(j) The manner in which internal revenue taxes, such as income 
tax, including withholding tax, estate and donor's taxes, value-added 
tax, other percentage taxes, excise taxes and documentary stamp taxes 
shall be paid, EITHER ELECTRONICALLY OR MANUALLY, through 
the collection officers of the Bureau of Internal Revenue or through duly 
authorized agent banks which are hereby deputized to receive payments 
of such taxes and the returns, papers and statements that may be filed 
by the taxpayers in connection with the payment of the tax: Provided, 
however, That notwithstanding the other provisions of this Code 
prescribing the place of filing of returns and payment of taxes, the 
Commissioner may, by rules and regulations, require that the tax 
returns, papers and statements and taxes of MEDIUM AND large 
taxpayers be filed and paid, respectively, THROUGH ANY 
AUTHORIZED AGENT BANKS, OR WITH ANY REVENUE 
DISTRICT OFFICE THROUGH REVENUE C[c]ollection 0[o]fficer[s, 
or through duly authorized agent banks] OR AUTHORIZED TAX 
SOFTWARE PROVIDER [: Provided, further, That the Commissioner 
can exercise this power within six (6) years from the approval of 
Republic Act No. 7646 or the completion of its comprehensive 
computerization program, whichever comes earlier: Provided, finaiiy. 
That separate venues for the Luzon, Visayas and Mindanao areas may
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be designated for the filing of tax returns and payment of taxes by said 
large taxpayers.
For purposes of this Section, 'large taxpayer' means a taxpayer 
who satisfies any of the following criteria:
"(1) Value-Added Tax (VAT) — Business establishment with 
VAT paid or payable of at least One hundred thousand 
pesos (PhP100,000) for any quarter of the preceding 
taxable year;
"(2) Excise Tax — Business establishment with excise tax 
paid or payable of at least One million pesos 
(PhPl,000,000) for the preceding taxable year;
"(3) Corporate Income Tax — Business establishment with 
annual income tax paid or payable of at least One million 
pesos (PhPl,000,000) for the preceding taxable year; 
and
"(4) Withholding Tax — Business establishment with 
withholding tax payment or remittance of at least One 
million pesos (PhPl,000,000) for the preceding taxable 
year.
Provided, however, That the Secretary of Finance, upon 
recommendation of the Commissioner, may modify or add to the above 
criteria for determining a large taxpayer after considering such factors 
as inflation, volume of business, wage and employment levels, and 
similar economic factors.]
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"The penalties prescribed under Section 248 of this Code shall be
2 
imposed on any violation of the rules and regulations issued by the
3 
Secretary of Finance, upon recommendation of the Commissioner,
4 
prescribing the place of filing of returns and payments of taxes by
5 
MEDIUM AND large taxpayers."
6 
SEC. 38. Section 248 of the National Internal Revenue Code of 1997, as
7 
amended, is hereby amended to read as follows:
8 
"SEC. 248. Civil Penalties, -
9 
(A) There shall be imposed, in addition to the tax required to
10 
be paid, a penalty equivalent to twenty-five percent (25%) of the
11 
amount due, in the following cases:
12 
(1) Failure to file any return and pay the tax due thereon as
13 
required under the provisions of this Code or rules and
14 
regulations on the date prescribed; or
15 
[(2) Unless otherwise authorized by the Commissioner, filing a
16 
return with an Internal revenue officer other than those with
17 
whom the return is required to be filed;]
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[(3)] (2) Failure to pay the deficiency tax within the time
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prescribed for its payment in the notice of assessment; or
20 
[(4)] (3) Failure to pay the full or part of the amount of tax
21 
shown on any return required to be filed under the provisions of
22 
this Code or rules and regulations, or the full amount of tax due
23 
for which no return is required to be filed, on or before the date
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prescribed for its payment.
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XXX
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SEC. 39. Section 269 (j) of the National Internal Revenue Code of 1997, as
3 
amended, is hereby amended to read as follows:
4 
"SEC. 269. Violations Committed by Government
5 
Enforcement Officers. — Every official, agent, or employee of the
6 
Bureau of Internal Revenue or any other agency of the Government
7 
charged with the enforcement of the provisions of this Code, who is
8 
guilty of any of the offenses hereinbelow specified shall, upon conviction
9 
for each act or omission, be punished by a fine of not less than Fifty
10 
thousand pesos (P50,000) but not more than One hundred thousand
11 
pesos (P100,000) and suffer imprisonment of not less than ten (10)
12 
years but not more than fifteen (15) years and shall likewise suffer an
13 
additional penalty of perpetual disqualification to hold public office, to
14 
vote, and to participate in any public election:
15 
XXX
16 
"(j) Deliberate failure to act on the application for refunds within the
17 
prescribed period provided under Section 112 AND SECTION 204 of
18 
this Act.
19 
XX x"
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SEC. 40. Implementing Rules and Regulations. - Within ninety (90) calendar
21 
days from the effectivity of this act, the Secretary of Finance, after due consultation
22 
with the Bureau of Internal Revenue, Bureau of Customs, and the private sector, shall
23 
promulgate the necessary rules and regulations for its effective implementation.
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SEC. 41. Separability Clause. - If any provision of this Act is declared
2 
unconstitutional, the remaining parts or provision not affected thereby shall remain in
3 
full force and effect.
4 
SEC. 42. Repealing Clause. - All laws, decrees, executive orders, implementing
5 
rules and regulations, issuances, or any part thereof inconsistent with the provisions
6 
of this Act are deemed repealed, amended or modified accordingly.
7 
SEC. 43. Effectivity. - This Act shall take effect fifteen (15) days after its
8 
publication in the Official Gazette or in a newspaper of general circulation.
9
10 
Approved,
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