TAX

Bam wants simplified tax system and lower taxes for small businesses

Aside from reducing personal income tax, the government must also provide small businesses with lower income tax rate, a simplified process and other privileges to stimulate their growth, according to Sen. Bam Aquino.

While he is certain that the personal income tax reform will be passed, Sen. Bam said the government must include tax reform for small businesses in its tax reform package.

“With all the support from the executive, we’re certain the personal income tax reform will be passed. What we should also focus on is the Small Business Tax Reform Act na makakatulong sa mga maliliit na negosyo na nagsisilbing kabuhayan ng maraming pamilyang Pilipino,” said Sen. Bam, referring to his Senate Bill No. 169.

Sen. Bam’s bill seeks to provide small businesses with a lower income tax rate, VAT exemption and simplified filing of taxes.

 Under the measure, all small businesses shall be exempt from payment of income tax for the first three years of its operation from date of establishment and will be subjected to lower income tax rates thereafter.

Small businesses earning less than P300,000 will be exempted from income tax while those with income ranging P300,000 up to P10,000,000 will be subjected to a 10-percent income tax rate.

 “This bill also proposes the lowering of the income tax rate for MSEs and an exemption from VAT, among other methods to​ ​help our small businesses grow,” said Sen. Bam.

 The measure also pushes for simpler bookkeeping, a special lane and assistance desk for MSEs, exemption from tax audit, annual filing of returns, and payment in installment.

 Sen. Bam stressed the need for simpler taxation, saying the Philippines placed 126th out of 189 economies in Ease of Paying Taxes in a joint study by PWC and the World Bank – Paying Taxes 2016.

 “This must change. The Small Business Tax Reform Act will simplify tax procedures and unburden our small businesses of the complex tax process,” said Sen. Bam.

 By streamlining the country’s tax system, it will boost the chances of our local enterprises to succeed and, in turn, generate prosperity and livelihood for more and more Filipinos.

Senate Bill No. 699: People’s Fund Act

At a time when public funding is under intense scrutiny, when the Filipino people are crying out for full transparency and accountability, and when government is being called on to implement massive reforms, how can we ensure that it is the PEOPLE of the Philippines who ultimately have a say on where public funds are being spent?

The People’s Fund seeks to revolutionize public budgeting and funding by giving the taxpayers of the Philippines the choice on where a portion of their hard- earned money should go.

It allows an individual taxpayer to allocate five percent (5%) of his or her income tax to be allocated for any of the following:

  1. An accredited charity or civil society organization;
  2. A priority national or local government project;
  3. A legitimate political party.

Under this bill, the Bureau of Internal Revenue (BIR) shall establish the mechanism that would enable individual taxpayers to select beneficiaries upon filing of their annual income tax returns.

Meanwhile, an inter-agency committee led by the Department of Budget and Management (DBM) shall determine the eligibility of respective organizations, and shall likewise set the conditions, guidelines, and reporting requirements for the receipt and use of the funds by the benefitting organizations.

This gives the Filipino public greater control over how their monies are spent, ultimately empowering Filipinos to support institutions and initiatives that they deem worthy.

In view of the foregoing ,the approval of the bill is earnestly sought.

PDFicon DOWNLOAD SBN 699

Senate Bill No. 697: Adjusting the Level of Net Taxable Income and Nominal Tax Rates

As the Philippines pushes for inclusive growth, it is imperative that the government create the necessary mechanisms to enable the vast majority of Filipinos to feel the fruits of this growth. At present, efforts are underway to promote ease of business, generate jobs, support the growth of micro, small, and medium enterprises (MSMEs); and address rising unemployment and underemployment.

In spite of all these, Filipinos are still feeling the pinch of high taxes and rising prices. The Consumer Price Index shows that a basket of goods worth PhplOO in 1997 is already worth Php228 in 2015, doubling in a space of 18 years since the tax brackets were last adjusted. While the private sector has a role in responding to the needs of its employees, many enterprises also struggle with ensuring fair and equal pay for their workers while keeping their own businesses afloat.

Thus, the government has to play the delicate balancing act between the growing demands of its labor force and the limitations of the private sector. One solution is to review and reform the current tax system in a way that reflects current prices, and enables a more equitable distribution of wealth for its citizens.

The measure, therefore, seeks to amend Section 24 of the National Internal Revenue Code of 1997, as amended, by adjusting the levels of net taxable income and simplifying the nominal tax rates for the purposes of computing the individual income tax. This Act effectively lowers the taxes on the Filipino working class — which comprises around 22 million of the Philippine population — allowing them to enjoy a higher net income and increasing their purchasing power, without necessarily imposing a burden on the micro, small, and medium enterprises (MSMEs). The collections from this Act also adjusts the tax level of the upper one percent (1%) of taxpayers, making sure that the government is able to collect a larger share of income from those who can afford to pay more. A more just tax system will also serve to encourage citizens to declare their true income and pay their taxes.

In effect, this measure serves as one of the important reforms to create a more equitable, just, and effective tax regime for Filipino taxpayers. It supports the government’s push for inclusive growth while ensuring that government is still able to raise funds for social programs that directly benefit the poor. It is a systemic, win-win solution that offers the greatest benefit to the greatest number of Filipinos. 

In view of this foregoing, immediate approval of this bill is earnestly sought. 

PDFicon DOWNLOAD SBN 697

eBIRForms Download Page

CLICK logo to download the eBIRForms Package

CLICK logo to download the eBIRForms Package

Project Background

In support of the Bureau of Internal Revenue’s goal to achieve electronic filing of all taxpayers to capture tax returns data, improve efficiency and provide accurate statistical reports, the Indra and Philcox Joint Venture (JV) is implementing the Solution for the Use of eBIRForms for Filing Tax Returns.

 

BIR’s directions are to:

•   Improve filing efficiency

•   Increase channels to taxpayers

•   Maximize the use of new technologies

•   Capture data from third party solutions

•   Capture more returns data online and offline

•   Increase tax return data capture

•   Improve accuracy in statistical reporting

•   REACH EVEN THOSE WITH LIMITED INTERNET CAPABILITY

What is the eBIRForms Project?

 The eBIRForms project aims to develop a filing infrastructure to provide electronic submission channels to all taxpayers (non-eFPS users) that are accessible and convenient. It will make tax preparation easier through automatic computations and validation features, lessening human error.

 The eBIRForms aims to increase the electronic capture of data, lessening manual encoding for BIR, and increasing accuracy in statistical reporting.

What are the Benefits of using the eBIRForms?

– Saves time because of automatic computations and auto-populated fields

– Easy to use

– Lessens human errors because of the validation feature

– Available even to those without consistent internet connection

– Captures taxpayer data

NOTE: The BIR Forms in the eBIRForms package are not new forms. They are the existing BIR Forms in electronic format.

Step-by step Guide to e-BIRForms

Step 1: DOWNLOAD AND INSTALL the Offline eBIRForms Package through the following website and links;

Click to DOWLOAD

Click to DOWLOAD

Step 2: Select the form and FILL UP by encoding data in the ITR;

Step 3: VALIDATE after completely encoding all necessary information. You may still update/modify by clicking EDIT if needed, an indicate correct entries. Then click Validate again.

Step 4: Click FINAL COPY (This is not applicable for eFPS)

Step 5: SUBMIT the accomplished tax return. An email message will be received by the taxpayer. 

 

 

 

 

 

Taxpayers using the Offline eBIRForms Version 4.7.07 can easily submit the 2014 ITR via email, and subsequently enrol after eFiling. Thus, email submission of 2014 ITR is allowed whether enrolled or not to eBIRForms System.

 

 

 

 

 Source: BIR

 

Senate Bill No. 2437: Php75,000.00 Cap for Income Tax Exemption of the 13th Month Pay/Other Benefits

AN ACT ADJUSTING THE 13TH MONTH PAY AND OTHER BENEFITS CEILING EXCLUDED FROM THE COMPUTATION OF· GROSS INCOME FOR PURPOSES OF INCOME TAXATION, AMENDING FOR THE PURPOSE SECTION 32 (B), CHAPTER VI OF THE NA TIONAL INTERNAL REVENUE CODE OF 1997, AS AMENDED

 

PDFicon  DOWNLOAD SBN 2486

Sen. Bam’s Tax Bill to Unburden the Poor Gets Support

Several stakeholders are pushing for the passage of Senator Bam Aquino’s measure that exempts marginal income earners (MIE) from paying income tax.
 
The Tax Management Association of the Philippines (TMAP) and the Magna Carta for Workers Alliance (MAGCAISA) both expressed their support during the committee hearing on Aquino’s Senate Bill No. 2777 or the Marginal Income Earners (MIE) bill.
 
Representatives from both TMAP and MAGCAISA said the passage of Aquino’s measure would help unburden poor Filipinos, which is composed mainly of farmers, fishermen, tricycle drivers, small sari-sari storeowners and other micro-entrepreneurs.
 
Aside from throwing support behind the MIE bill, TMAP president Rina Manuel also called for the simplification of tax filings and processes for individuals and businesses.
 
MAGCAISA Steering Committee representative Elizabeth Angsiaco, for her part, batted for the expansion of the bill to cover all MIEs.
 
After the hearing, Aquino welcomed the snowball of support for his bill, saying the government should not take way the little income that poor Filipinos earn from their livelihood.
 
“I consider it a great disservice to our countrymen if the government will take away what was left of their meager income,” Aquino said.
 
Aside from hampering its growth, Aquino stressed that poor Filipinos will be discouraged to enter the formal economy if they would be subjected to tight scrutiny by the Bureau of Internal Revenue (BIR).
 
The senator noted that the number of registered MSMEs in the country – currently pegged at approximately 800,000 – has not grown in years.
 
“If we want to help them grow, we need to create an environment conducive for small businesses to thrive. We need to encourage those businesses in the informal economy to register and join the formal sector,” he added.
 
Aquino’s bill seeks to spare micro entrepreneurs, or self-employed individuals who earn not more than the minimum wage equivalent in their regions, from paying income tax, just like minimum wage earners.
 
The senator filed the measure after the Bureau of Internal Revenue released a memorandum circular – Revenue Memorandum Circular (RMC) No. 7-2014 – compelling MIEs to pay income tax returns.
 
According to BIR’s circular, MIEs include agricultural growers/producers such as farmers and fishermen selling directly to consumers, small sari-sari stores, small carinderias or “turo-turos,” and drivers/operators of a single unit tricycle.

Spare the Poor, Pass the MIE Bill – Sen. Bam

Spare the poor.

Senator Bam Aquino made this pronouncement as he called for the swift passage of the Marginal Income Earners (MIE) bill, saying ‘it could be another landmark bill of this administration which is pro-poor and pro-business.’

 During the Senate Ways and Means committee hearing on the MIE bill, Aquino stressed the measure doesn’t affect the government’s revenue-collection efforts and, at the same time, eases the burden of millions of Filipinos.

“I’m hoping that we can move this forward,” said Aquino, adding that the Senate has already reached out to its House counterpart to look into the MIE Bill.

Aquino filed Senate Bill 2227 which seeks to exempt MIEs such as farmers, fishermen, tricycle drivers, small sari-sari storeowners and other micro-entrepreneurs, from paying income tax

 Under Senate Bill 2227, Aquino said MIEs, or self-employed individuals who earn not more than the minimum wage equivalent in their regions, should be spared from paying income tax, just like minimum wage earners.

“The MIE bill basically exempts marginal income earners at the same level as the minimum wage earners,” said Aquino.

Aquino filed the bill after the Bureau of Internal Revenue released a memorandum circular — Revenue Memorandum Circular (RMC) No. 7-2014 — compelling micro entrepreneurs to pay income tax returns.

According to BIR’s circular, MIEs include agricultural growers/producers such as farmers and fishermen selling directly to consumers, small sari-sari stores, small carinderias or “turo-turos,” and drivers/operators of a single unit tricycle.

 “Charging taxes does not help them in any way. Rather, it becomes a burden to a sector that is situated below the poverty line,” Aquino said.

 “Imposing income tax on our micro businessmen is tantamount to confiscating what little income they are able to make on a daily basis,” he added.

“This measure is just and fair and follows the constitutional provision of equal protection to all Filipinos.”

 

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