Requires: A Magna Carta of Taxpayers’ Rights

It is about time the Philippines adopted a constitution or invoice of rights for taxpayers. We’re at the moment taking steps in the correct course as a number of measures to enumerate taxpayers’ rights are pending approval. The submission of those payments was historic, however in fact we look ahead to their passage and approval.

Essentially the most notable measure is Home Invoice 4125, or the proposed Ease of Paying Taxes Act, which was authorised by the Home of Representatives final September and is now pending with the Senate Methods and Means Committee. Certainly one of its fundamental objectives is “[t]o To supply a wholesome setting for the taxpaying public that protects and upholds the rights and well-being of taxpayers and ensures the truthful therapy of all taxpayers.” A elementary rights provision to be included within the Nationwide Inner Income Code.

There are additionally three Senate payments (SBs 1077, 1199 and 1309) proposing a separate “Magna Carta of Taxpayer Rights”. Every invoice gives an extended listing of taxpayer rights and even establishes separate lists of rights in civil and felony issues. Like HB 4125, the payments suggest the creation of the Workplace of the Nationwide Taxpayer Advocate to advertise tax compliance and help all taxpayers, whether or not people or entities.

A tax system that’s truthful and leads solely to tax compliance. Belief must be constructed between taxpayers and tax authorities, and a taxpayers’ constitution, setting out the basic rights and rules that additionally shield taxpayers, is a cornerstone of constructing that belief.

A good tax system additionally provides buyers safety and may make the nation extra engaging to international buyers. It must be famous that almost all of our Asian neighbors have legislated taxpayer rights:

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* Vietnam – Article 6 of its Tax Administration Regulation lists the rights of taxpayers.

* Taiwan – The Taxpayer Rights Safety Regulation was enacted in 2016.

* Cambodia – The Finance Act 1994, as amended, incorporates a piece on taxpayers’ rights and obligations and provisions on taxpayers’ rights within the part on tax administration.

* Laos – Articles 62 and 63 of its Tax Regulation, as amended, enumerate the rights and obligations of taxpayers.

* China – Chapter I of the Regulation of the Folks’s Republic of China on Administration of Tax Assortment lists the rights of taxpayers and tax brokers.

* Korea – It has a Taxpayer Constitution in its Nationwide Tax Constitutional Regulation, which additionally requires the Commissioner of the Nationwide Tax Service to promulgate a Invoice of Rights for taxpayers.

* Hong Kong – It has a separate constitution for taxpayers.

* India – The Union Price range 2020 inserted Part 119A to codify a Taxpayers’ Constitution which units out the rights and obligations of taxpayers.

In an article dated November 15, 2018, I discussed that the Asia-Oceania Tax Advisors Affiliation, the Confédération Fiscale Européenne and the Society of Belief and Property Practitioners had collaborated to develop a mannequin taxpayer constitution. The aim was to suggest a mannequin constitution that governments may undertake for laws. The authors acknowledged that as taxpayers elevated cooperation and demanded transparency of their tax affairs, so did assurance that they have been being handled pretty, equally and transparently.

Congress ought to due to this fact go HB 4125, which goals to introduce a brand new “Title XIV” entitled “Taxpayer’s Rights” into the Tax Code, or undertake the “Magna Carta of Taxpayer’s Rights” created by SBs 1077, 1199 and 1309 is proposed. It must be famous that the brand new Part 312 of the Tax Code, as proposed by HB 4125, would learn:

“Sec. 312. Taxpayer’s Invoice of Rights. – Along with the taxpayer rights and treatments supplied for within the Nationwide Inner Income Code of 1997, as amended, the taxpayer has the next elementary rights:

* Proper to not pay greater than the correct quantity of tax;

* Proper to a good and simply tax system;

* Proper to well timed and simply comprehensible info;

* Proper to high quality service and tax schooling;

* Proper to constant and clear software of the legislation;

* Proper to have taxpayer classification taken into consideration when making ready and imposing tax laws;

* Proper to privateness and confidentiality of data except licensed by the taxpayer or by legislation;

* Proper to expeditious dealing with of circumstances, assessments, audits, investigations and different comparable actions;

* proper to finality of tax circumstances; and

* Proper to be shielded from malicious, inflated and inaccurate evaluations and to have them redressed.”

All the foregoing rights are elementary. They present what must be protected. Due to this fact, making them a part of state legislation shouldn’t be an issue.

In any case, we are going to focus on every of those rights in our subsequent few articles, beginning with the correct to be shielded from malicious, extreme, and false evaluations. Proceed.


Euney Marie J. Mata-Perez is a CPA Counsel and Managing Accomplice of Mata-Perez, Tamayo & Francisco (MTF Counsel). She is a company, M&A and tax lawyer and is the incoming Chair of the Tax Committee of the Administration Affiliation of the Philippines. She acknowledges the contribution of Jan Ethan L. Gordola on this article, which is for common info solely and isn’t an alternative to skilled recommendation when the info and circumstances warrant. When you’ve got any questions or feedback, e mail the writer at [email protected] or go to the MTF web site at www.mtfcounsel.com.