BIR hopes TRAIN law will encourage more small businesses to pay proper taxes

MANILA, Philippines – The Bureau of Internal Revenue (BIR) admits having difficulty in determining if small and medium enterprises are paying proper taxes.

According to the BIR, they can ensure that employees are paying proper taxes as it can be done automatically, unlike those who are self-employed or those with businesses.

“But the self-employed pay voluntarily, we relied on voluntary filing and payment,” BIR Asst. Commissioner Atty. Marissa Cabreros said.

However, with the implementation of the tax reform law, the BIR is confident that many self-employed will pay their taxes.

Based on the TRAIN law, small medium enterprise owner and the self-employed have the liberty to choose the manner in which they pay their taxes.

Under the tax reform, all self-employed and businesses earning below P300-million yearly should pay an 8 % tax, or through a graduated income tax rate.

“Your gross receipts is 8%, it’s easier. You should file. You will not worry if you will collect it and keep your gross receipts. Another option is the gross receipts you collect, and it has deduction,” Cabreros said

The BIR said the process has been easier under the TRAIN law that’s why they are expecting more tax payments.

For Maricar Cruz, who owns a laundry shop, she is happy with the tax reform the government implements. She vows to always pay her taxes on time.

“The 8% tax is okay. I hope it could help for the progress of the country,” Cruz said.

However, Laban Konsyumer President Vic Dimagiba said although the process has been simplified, small medium enterprises cannot hugely benefit from the tax reform law.

“They should pay VAT that’s for sure. They can no longer benefit. They have additional payments. They will pass on to their customers all the increases in fuel and electricity and other hikes,” Dimagiba said.

The BIR said everyone might feel burdened because of the tax reform, but notes that many will benefit in the long run.

The agency said additional taxes collected from the tax reform will be allocated to the projects of the government that will further improve the Philippine economy. – Mon Jocson | UNTV News & Rescue

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