PHILIPPINES Trends and Developments Contributed by: Francis L. Fragante, Jennifer Marie G. Castro and Carriz Andrea F. Nana, Cruz Marcelo & Tenefrancia
ning stability and encourages large-scale and capital- intensive investments. The law also makes the 5% Special Corporate Income Tax (SCIT) on gross income earned clearer and more attractive in its application. For qualified registered businesses, SCIT continues to apply in place of all national and local taxes, reducing the overall tax load and simplifying compliance for qualified RBEs. The CREATE MORE Act expands and clarifies VAT zero-rating and VAT exemption provisions, particularly for export enterprises and domestic market enter - prises with export activities. These adjustments are designed to reduce production costs and strengthen competitiveness in global markets. The law also advances a more balanced incentive structure that benefits both domestic and foreign investors, encourages reinvestment and supports technology transfer, job creation and regional devel - opment. Taken together, the CREATE MORE Act signals a push for incentives that are more competitive, more predictable and more responsive to investor needs. By improving clarity around corporate incentives and administrative processes, the law seeks to attract investment, expand employment and support sustain - able economic growth across the Philippines. Ease of Paying Taxes Act Republic Act No 11976, also known as the Ease of Paying Taxes (EOPT) Act, was enacted to modern - ise tax administration in the Philippines and make tax compliance simpler, fairer and more efficient. The law aims to reduce the burden on taxpayers by stream - lining procedures, strengthening taxpayer rights, and improving the overall efficiency of the tax system. One of the main provisions of the EOPT Act is the adoption of a “file-and-pay-anywhere” system, which allows taxpayers to file tax returns and pay taxes through any authorised bank, revenue district office or electronic platform, regardless of where they are registered. This removes geographic restrictions and reduces compliance costs and delays.
The law also classifies taxpayers as micro, small, medium and large, based on their size and capacity. This ensures that tax requirements, reporting obliga - tions, and penalties are proportionate and reasonable, especially for micro and small businesses. The EOPT Act encourages wider adoption of elec - tronic filing, electronic payments and digital record- keeping, expanding the country’s digital tax services to improve processing efficiency, reduce filing errors and strengthen transparency within tax administra - tion. The EOPT Act removes or reduces certain penalties linked to honest mistakes, including penalties for pay - ing taxes at the wrong venue. This reform promotes fairness and encourages voluntary compliance rather than punitive enforcement. The law shortens the processing time for VAT refunds, setting clearer timelines for the Bureau of Internal Revenue (BIR) to act on refund claims. This provision improves cash flow for businesses, especially export - ers and VAT-registered enterprises. The EOPT Act reinforces taxpayer rights by requiring clearer communication from tax authorities, simplify - ing audit procedures and increasing transparency in tax assessments and collections, which are measures aimed at strengthening trust between taxpayers and the government. By simplifying filing and payment rules, expanding digital tax access, improving refund timelines, reduc - ing venue-based penalties and reinforcing taxpayer rights, the EOPT Act seeks to lower administrative costs, reduce preventable disputes and support a more transparent, efficient and business-friendly com - pliance environment that benefits both taxpayers and the government. PPP Code The Philippines faces an infrastructure demand of extraordinary scale. Although the country is rich in natural resources, it has struggled to convert this advantage into sustained economic growth, with infrastructure limitations widely cited as a core barrier. Inadequate transport, energy, digital and public ser -
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