TRAIN law mandates a substantial shift toward E-receipts, to be implemented at the beginning by July

09 June 2022
The Tax Reform for Acceleration and Inclusion (TRAIN) Law requires all e-commerce firms, export firms, and largescale taxpayers to shift towards digital issuance of invoices and receipts by the start of July.

The Tax Reform for Acceleration and Inclusion (TRAIN) Law has issued a mandate that applies to all e-commerce firms, export firms, and even to largescale taxpayers; these entities are now tasked to begin shifting toward digital issuance of invoices and receipts at the start of July, according to a report.

Afterwards, the Bureau of Internal Revenue (BIR) announced its intention to conduct a pilot on the e-invoicing, e-receipting, and e-sales system (EIS) in July.

The TRAIN was signed by former president Rodrigo Duterte back in 2017; its rules now require the BIR to identify taxpayers who must still issue e-invoices and e-receipts within five years from the measure’s effectivity.

The BIR states that every firm currently engaged with e-commerce and export enterprises is obligated to submit digital copies of receipts and invoices. Furthermore, it also clarifies that it is now mandated that largescale taxpayers must utilise the EIS.

The EIS started development in 2019, thanks to the Department of Finance (DIF) coordinating with the Korea International Cooperation Agency (KOICA), which offered a $7.3 million grant to create the program. The Philippine government received further financing from KOICA to help quicken the pilot implementation of the project and try it on no less than 100 largescale taxpayers.

Afterwards, KOICA donated significant equipment and software, specifically those related to storage, servers, and peripherals, to the Philippine government to secure the long-term sustainability of the EIS. The kit turned over to the BIR by KOICA includes 270 desktops, 130 laptops and 130 printers. The aim is to better transition from physical to the electronic issuance of sales documents.

To create the best version of the EIS, KOICA took the services of Douzone Consortium. This South Korean firm specialises in the electronic tax invoice and groupware information security field.

The EIS was then given a detailed breakdown; it is a web-based system that can be accessed online with a given URL. So far, three host portals have been created: the EIS Taxpayer Portal, the EIS Certification Portal and the EIS Portal, which the Revenue Officers will explicitly use. It aims to be a convenient platform for Taxpayers to issue e-invoices and e-receipts to their customers.

Additionally, taxpayers can store relevant data in the EIS; these include seller/buyer information, sales amount, and price discounts, among others, to be transmitted to the BIR. The bureau is optimistic about how this system can efficiently provide reliable data to revenue officers for their tax assessment.

Once the program has been fully implemented, the EIS will become a part of the BIR’s digital transformation program, which aims to reduce the cost of taxpayer transactions, like those on invoices and receipts.

The program is done in part due to the BIR’s goal of increasing the coverage of their electronic channels; with recent reports reaching up to 4.63 million business taxpayers last year to 4.41 million in 2020, the bureau hopes that by speeding up its efforts, so too will its capability of shifting its procedures to the digital space.

For small, medium, and significantly larger firms, ensuring tax compliance has become an increasingly heavy burden. Tax codes are getting more complex, and authorities demand increased reporting in their search for non-compliance. All the while, total compliance is deemed essential to prevent fines and avoid triggering audits and investigations.

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