Thursday, December 14, 2017

It’s not complicated: Angara says Senate bill aims to simplify tax rules

Oct 30, 2017 @ 18:16

The Senate’s version of the Tax Reform for Acceleration and Inclusion (TRAIN) provides for a flat tax rate, simpler and one-time tax filing to self-employed and professionals, Sen. Sonny Angara on Monday said.

“The previous administration opted for the scare and shame tactic but I believe a developmental approach or incentivizing them to follow tax rules would be a more effective strategy, he said.

“That’s why we introduced an 8% flat tax for easier compliance. Padaliin na natin and sistema lalo na para sa mga maliliit na negosyante,” Angara, chair of the Senate ways and means committee, added.

In the first tax reform package, professionals and self-employed individuals can choose between an 8% flat tax on gross sales or receipts to be filed once a year or the scheduler personal income tax rate with allowable deduction.

The 8% tax, Angara said, will be in lieu of the personal income tax which is currently filed quarterly and the percentage tax, filed monthly.

In making a distinction between the tax treatment of compensation income earners and self-employed individuals and professionals, Angara stressed the need to simplify the process.

“Income taxes of compensation income earners – like our teachers, nurses, call center agents – are automatically withheld by their employers. On the other hand, self-employed and professionals like owners of sari-sari stores and carinderia and our doctors and lawyers, have to file their taxes on their own or with the help of accountants which they can’t afford to hire most of the time,” he said.

“Kung kaya marami sa ating mga self-employed at professionals and hindi nakakasunod nang tama sa mga regulasyon ng pagbubuwis,” Angara added.

Marginal income earners, under Senate bill No. 1592, that include farmers, fisherfolk, market vendors, sari-sari store owners, tricycle drivers will be exempt from paying income taxes.

“By automatically exempting them from income tax, in effect, marginal income earners would finally be afforded equal protection and benefits that the minimum wage earners have long been enjoying,” Angara said.

Data from the Bureau of Internal Revenue (BIR) showed that self-employed and professionals only contribute 15% of the total income tax collection, while the 85% is shouldered by compensation income earners.

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