Will the small TRAIN companies benefit?


The Philippine Tax Whiz proposes a flat tax rate based on gross for small businesses

Published at 5:30 PM, November 30, 2017

Updated at 5:30 PM, November 30 of 2017

The Senate has already approved its version of the Law of Tax Reform for Acceleration and Inclusion (TRAIN). Will TRAIN's small businesses benefit? Were your proposals considered to ensure we support micro, small and medium-sized enterprises (MSMEs) of rapid growth in the country?

Yes. I am very happy to say that our government listens to the taxpayers. When we proposed a simple and lower tax for small businesses, the Department of Finance (DOF) already included it in the list for the comprehensive tax reform.

Our initial proposal is to introduce a fixed tax of 10% based on the gross income of small businesses. In the Senate version of TRAIN that was approved in the final reading on November 28, they proposed a flat tax of 8% instead of income tax and companies for small businesses.

However, after studying our proposal, I realized that large corporations only pay an effective rate of 5% or less due to tax plans or tax evasion plans, while the Internal Revenue Office (BIR) ) also uses a 5% threshold for the value added tax (VAT) and the income tax payment. So why not allow small businesses – which we propose have a P5 million or less in annual gross sales – to pay a flat tax of 5% to file and pay annually to encourage voluntary compliance?

In addition, as reiterated in In our letter to our senators, we are proposing an exclusive salary tax table so that we can collect more from individuals and freelancers with the simple and lower tax rate of 5% and 15%, respectively .

In an interview, you were quoted as saying that individuals and independent professionals are not paying the correct taxes. Is it true that only our employees are burdened by our high tax rate?

Based on the presentation by Deputy Second Representative Marikina Miro Quimbo during our Fiscal Forum earlier this year, he highlighted that 99% of employees are paying taxes while less than 50% of self-employed workers and professionals They were fulfilling.

Based on the 2015 BIR annual report, 82% of our income tax revenues come from taxes withheld at the source of the employees. This clearly shows that due to the high rate of income tax, our employee workers have had to pay for the last 20 years, while individuals and independent professionals have opted not to register or pay their taxes correctly.

Since you are working in close collaboration with the BIR Commissioner, Caesar Dulay, on tax administration reforms, have there been significant improvements that directly benefit our small businesses? Will the certification program of the Seal of Honesty (SOH) really help stop corruption in the BIR?

Yes. I am proud to say that we have a very honest and good BIR boss. Commissioner Dulay has been very open to all of our proposals to simplify tax compliance, broaden the taxpayer base and increase voluntary compliance to stop corruption in the BIR.

Has published several issues, from the suspension of the tax audit in its first 3 months to evaluate its efficiency and impact on our collections, the reduction of the documentary requirements to streamline transactions in the BIR and the creation of the taxpayer group medium to help small businesses in district income offices. [19659006] As Commissioner Dulay reiterated during the launch of the Seal of Honesty, we must help raise the right taxes and stop bribing the examiners to promote integrity and honesty in the BIR. We have to pay our taxes correctly and on time.

The SOH Certification Program aims to provide incentives to taxpayers who will qualify and receive the SOH after filing annual tax returns in April 2018. For more information, visit www. sealofhonesty.ph. – Rappler.com

Mon Abrea, popularly known as Philippine Tax Whiz, is one of the outstanding people of 2016, a Move Move 2016 Digital Mover, one of the 2015 The Outstanding Young Men of the Philippines (TOYM), a CEO of Asia Young Leader of the Year, and founder of the Abrea Consulting Group and the Center for Strategic Reforms of the Philippines (CSR Philippines). He currently serves as Advisor to the Internal Revenue Commissioner of the Philippine Government in the reform of the tax administration to promote inclusive growth. Follow Mon on Twitter ( @askthetaxwhiz ) or visit his Facebook page. You can also send it by email to [email protected]

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