Philippines : Angara: Doing Business Made Easier With Train Law.
Senator Sonny Angara said the newly enacted tax reform law will make the lives of Filipinos with small businesses easier by not only reducing their taxes, but also by simplifying the tax filing and payment process.
Angara cited the latest Doing Business report of the World Bank where the Philippines' ranking slipped to 113th this year from 99th last year among 190 countries.
According to the World Bank report, to start a business in the Philippines, a budding entrepreneur would need to make 20 different tax and contribution payments and visit multiple agencies in person. Moreover, the new business would be expected to pay 43% of its commercial profits in taxes and contributions annually.
To address this, under Republic Act 10963 or the Tax Reform for Acceleration and Inclusion (TRAIN) law sponsored by Angara, compensation income earners as well as professionals and self-employed individuals with small businesses, whose annual taxable income do not exceed P250,000, are exempted from income taxes and are no longer required to file income tax returns (ITRs).
At present, even if self-employed and professionals have no tax due, they are still required to file ITRs for record and monitoring purposes of the Bureau of Internal Revenue (BIR).
Meanwhile, those with annual gross sales or earnings of above P250,000 but below P3 million can choose between a flat tax of 8% or the schedular personal income tax rates where they can deduct their business operation costs and expenses.
"Marami talaga sa ating self-employed at professionals ang nahihirapang makasunod sa mga regulasyon ng pagbubuwis. Minsan nga, mas malaki pa ang gastos nila sa pag-comply sa tax rules kesa sa mismong babayaran nilang buwis. Kaya minabuti nating padaliin na ang sistema lalo na para sa mga maliliit na negosyante," said Angara, chairman of the ways and means committee.
Furthermore, the TRAIN law increased the value-added tax (VAT) threshold from the current P1.9 million to P3 million. This means that those earning below P3 million will be exempt from the 12% VAT and will be subject to the 3% percentage tax only if they opt for the schedular personal income tax rates.
Presently, VAT and percentage tax are filed and paid every month. With the reform, such filing and payment will be made quarterly.
The TRAIN law likewise provided that only those who have annual sales or earnings of above P3 million--from the current P600,000--will be required to have their books of accounts audited by certified public accountants.
The BIR is also mandated to cut the ITR form from the current 12 pages to four pages only.
RA 10963 also clearly states that the BIR commissioner must simplify the business registration and tax compliance requirements of self-employed individuals and professionals.
[c] 2017 Al Bawaba (Albawaba.com) Provided by SyndiGate Media Inc. ( Syndigate.info ).
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|Date:||Dec 28, 2017|
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