GaN

NINETEENTH CONGRESS OF THE ) ECEIVED a\ 2\
REPUBLIC OF THE PHILIPPINES ) FA
First Regular Session )

HOUSE OF REPRESENTATIVES.

‘ Wp.No, 7179

Introduced by Representative DANTE S. GARCIA

AN ACT ORDAINING A
BILL OF RIGHTS AND OBLIGATIONS OF THE TAXPAYER

EXPLANATORY NOTE

‘The power to tax is inherent in every sovereign nation as it is necessary for the
continuous running of any government. In fact, it is the strongest power of the state
that every taxpayer is required to contribute his share in the running of the
government. Because of the opposing views and interests between the tax authorities
and the taxpayers, disagreements often ensue. These disagreements are further fueled
by the fact that there are numerous tax laws for the collection of both national and local
taxes, and these laws are hard to understand because of its highly technical nature. In
addition, the taxpayers are often not aware of their rights and obligations in the realm
of taxation.

To address the foregoing situation, this measure seeks to codify and simplify the
various taxpayers’ rights, both in national and local taxation, which are currently
contained in various laws and issuances for ease of reference and guidance of the
taxpayers. It also reminds the taxpayers that every right carries with an obligation and
thus, this measure likewise urges the taxpayers to observe and comply with their tax
obligations in favor of the government.


This representation further acknowledges that no matter how grandiose the
rights of the taxpayers are, it will be put to naught if the taxpayers themselves cannot
enforce these rights. At the end of the day "the strength of democracy lies not in the
rights it guarantees but in the courage of the people to invoke them whenever [these
rights] are ignored or violated." That said, this measure provides for the establishment
Of the Office of the National Taxpayer's Advocate with the primordial duty of protecting
and fighting for the rights of the taxpayers especially those who are having financial
difficulty in engaging the services of a private counsel or qualified professional.

ri sought.

[|l] «

In view of the foregoing, urgent approval of this measure is eat

*Ynot v. Intermediate Appellate Court, G.R. No. 74457, (March 20, 1987).
2


NINETEENTH CONGRESS OF THE )
REPUBLIC OF THE PHILIPPINES )
First Regular Session )

HOUSE OF REPRESENTATIVES.

¥B.No._7179

Introduced by Representative Dante S. Garcia

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. — It is 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;


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;

d) 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
Tegulations, 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

g) 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 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.

©) 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.

@) 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.

) 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.

g) 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.


i) 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,

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.

k) 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;


) 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.


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

9) 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.


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.


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. — All 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,