tax – Page 2 – Author Carlo Carrasco

Residents of Las Piñas City urged to avail of discounts by paying real property taxes (RPT) early

December 8, 2024December 4, 2024carlocarrasco

Recently in the City of Las Piñas, residents who own properties were advised to take advantage of discounts offered to them when paying their respective real property taxes (RPT) early enough starting this month, according to a Manila Times news report.

To put things in perspective, posted below is an excerpt from new report the Manila Times. Some parts in boldface…

Real property owners in Las Piñas City are reminded to settle their real property taxes early and take advantage of discounts offered for prompt payment in 2025.

Las Piñas Councilor Mark Anthony Santos announced that the advance tax payment period runs until Dec. 15, 2024. Taxpayers who settle their dues by this date will receive a 20 percent discount. Payments made from December 16 to 31 will qualify for a 16 percent discount, while payments completed between Jan. 1 and 31, 2025, will be granted a 10 percent discount.

To be eligible for these discounts, taxpayers must pay their taxes for the entire year and ensure there are no outstanding delinquencies, Santos emphasized.

He said failure to pay on time would result in penalties. A 10 percent surcharge will be applied to delinquent payments, along with a one-time administrative fee for late second installment payments. As stipulated in Sections 260 and 263 of Republic Act 7160, the Local Government Code of 1991, unpaid taxes could lead to further actions, including the auctioning of delinquent properties.

“If the real property tax is not paid, the city government will avail of remedies through administrative action or judicial proceedings,” Santos warned.

The city treasurer’s office also reminded new property owners to update their records at the city assessor’s office to ensure they receive official notices and avoid tax issues.

Let me end this piece by asking you readers: If you are a resident of Las Piñas City, what is your reaction to this development? If you are a local property owner, are you ready to settle your real property tax with the City Government this month? Are the discounts for early payments enticing enough to you? How many property owners in your local community are aware of the discounts offered?

You may answer in the comments below. If you prefer to answer privately, you may do so by sending me a direct message online.

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Philippines achieved double-digit tax collection growth in first 9 months of 2024

October 23, 2024October 11, 2024carlocarrasco

Recently the Department of Finance (DOF) announced that the Philippines achieved double-digit growth in the January-September stretch of 2024, according to a Manila Bulletin business news report.

To put things in perspective, posted below is an excerpt from the Manila Bulletin report. Some parts in boldface…

The Department of Finance (DOF) reported that collections from the government’s two main tax agencies showed strong double-digit growth in the first nine months of the year.

The Bureau of Internal Revenue (BIR) and the Bureau of Customs collectively gathered P2.771 trillion from January to September 2024, a 10 percent increase from P2.518 trillion in the same period last year.

Of this total, the BIR, which is responsible for nearly 70 percent of the government’s annual revenue, collected P2.08 trillion by the end of September—a 12 percent increase compared to P1.858 trillion the previous year.

This nine-month collection accounted for 73 percent of the BIR’s full-year target of P2.842 trillion.

In contrast, the Customs bureau raised P690.8 billion as of September, a modest 4.6 percent increase from P660.39 billion in the previous year. This amount represents 73.5 percent of its annual target of P939.7 billion.

In May, the Development Budget Coordination Committee (DBCC) revised its tax collection projections for the BIR and Customs downward, citing expectations of slower economic growth this year.

According to the DBCC’s 2024 Quarterly Fiscal Program, approved on May 23, the BIR and Customs are now expected to collect P3.788 trillion this year, a reduction of 5.6 percent from the original target of P4.014 trillion.

The BIR’s full-year collection target was adjusted down by 6.7 percent from the previous goal of P3.055 trillion, while the Customs bureau’s target was lowered by 2 percent from the earlier estimate of P959 billion.

Budget Secretary Amenah F. Pangandaman, who chairs the DBCC, explained to the Manila Bulletin that these adjustments were primarily driven by a lower-than-expected economic growth outlook, among other factors.

Let me end this post by asking you readers: What is your reaction to this recent development? Do you think the BIR will be able to collect P3 trillion by the end of the year? Do you think the recent tax collection reports suggest that the national economy will grow stronger in the next two years?

You may answer in the comments below. If you prefer to answer privately, you may do so by sending me a direct message online.

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President Marcos signs into law VAT on foreign digital services

October 10, 2024October 2, 2024carlocarrasco

Foreign entities that provide digital services to their customers here in the Philippines will have to pay their fair share of taxes as President Ferdinand “Bongbong” Marcos, Jr., recently signed into law Republic Act Number 12023 (RA12023) which imposes the 12% value-added tax (VAT) on foreign digital service providers (DSPs), according to a Philippine News Agency (PNA) news article.

To put things in perspective, posted below is an excerpt from the PNA news article. Some parts in boldface…

President Ferdinand R. Marcos Jr. signed into law on Wednesday a measure imposing a value-added tax (VAT) on foreign digital services providers (DSPs).

A priority measure of the administration, Republic Act (RA) 12023 imposes a 12 percent VAT on foreign DSPs, such as Netflix, Disney, and HBO, to generate additional revenue for the government.

In his message, Marcos said the new law would level the playing field for local providers.

“If you are reaping the rewards of a fruitful digital economy here, it is only right that you contribute also to its growth. After all, whether you are a small tech startup or a global tech giant based halfway around the world, if you are making money here in the Philippines, you’re a part of our community, and with that comes a shared responsibility,” Marcos said.

According to the President, about PHP105 billion in revenue is expected to be collected in the next five years due to RA 12023.

The amount is enough to build 42,000 classrooms, more than 6,000 rural health units, and 7,000 km of farm-to-market roads, the Chief Executive noted.

Additionally, 5 percent of the revenues generated by the law will be allocated to the local creative industry.

“This means our artists, filmmakers, musicians, the very people who fill our platforms with storage and the content, will directly benefit. It ensures that our creative talents are not just surviving in a competitive digital market, but will be allowed by fairness and progress,” Marcos said.

The President thanked the legislators for passing the measure even as he called on companies covered by the law to support and heed the rules of the Act.

‘Fair and square’ tax policies – Senator Sherwin Gatchalian, meanwhile, said the new law is expected to address revenue losses by clarifying the taxability of non-resident digital service providers and addressing the ambiguity in the previous law.

“We believe in the importance of creating an environment where our digital services providers, whether they are nonresident or local, operate under fair and square tax policies,” Gatchalian said in a statement. He said the new measure does not mean a new tax imposition.

Let me end this post by asking you readers: What is your reaction to this recent development? Do you think the new law will be good for the economy of the Philippines? Do you think that the foreign digital service providers will somehow raise the subscription rates and fees for their customers here in the Philippines in response to the new law?

You may answer in the comments below. If you prefer to answer privately, you may do so by sending me a direct message online.

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BIR files tax evasion charges against dismissed mayor Alice Guo and two others

August 15, 2024August 14, 2024carlocarrasco

The Bureau of Internal Revenue (BIR) formally filed tax evasion charges against former Bamban mayor Alice Guo and two other suspects, according to a Philippine News Agency (PNA). For the newcomers reading this, this development is related to the raided Philippine Offshore Gaming Operator (POGO) hub in Bamban, Tarlac province.

To put things in perspective, posted below is an excerpt from the PNA news article. Some parts in boldface…

The Bureau of Internal Revenue (BIR) on Wednesday filed tax evasion charges against dismissed Bamban, Tarlac mayor Alice Guo and two others before the Department of Justice.

Commissioner Romeo D. Lumagui Jr. filed the charges against Guo, and Jack L. Uy and Rachelle Carreon of Baofu Land Development, Inc., which arose from Guo’s admission that she transferred her shares in Baofu to Uy.

“Upon investigation, the BIR discovered that no capital gains tax (CGT) and documentary stamp tax (DST) returns were filed and paid in relation to this transfer,” the BIR said in its statement.

The three were charged with “attempt to evade or defeat tax, failure to file CGT and DST returns, and failure to file/ supply certain information.”

Lumagui noted that while the parties to the transfer are Guo and Uy, Carreon, as the corporate secretary of Baofu, would also be charged with the same criminal case for tax evasion due to her “deliberate failure to report” the non-payment and non-filing of CGT and DST returns to the BIR.

“She even verified under oath the General Information Sheet reflecting the transfer even if no taxes were paid and no returns were filed,” he said.

Let me end this piece by asking you readers: What is your reaction to this recent development? Do you think this development will compel Alice Guo to escape abroad from the authorities?

You may answer in the comments below. If you prefer to answer privately, you may do so by sending me a direct message online.

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BIR expecting to collect billions from online sellers with withholding tax

August 9, 2024August 2, 2024carlocarrasco

With the 1% withholding tax on online sellers already in effect, Bureau of Internal Revenue (BIR) expects to collect billions of Pesos from the said sellers although they could not give an estimate on how much could be collected, according to a GMA Network news report.

To put things in perspective, posted below is an excerpt from the GMA news report. Some parts in boldface…

The Bureau of Internal Revenue (BIR) is expecting to collect billions of pesos in taxes from the growing e-marketplace industry after it subjected online sellers under the withholding tax system.

“Itong withholding tax on online transactions, dahil effective na ‘yan, inaasahan natin na malaki rin ang maitutulong nito,” BIR Commissioner Romeo Lumagui Jr. told reporters at the sidelines of the agency’s 120th anniversary celebration in Pasay City on Thursday.

(The withholding tax on online transactions, since this has been effective, we expect it could help immensely.)

Lumagui said the BIR cannot yet give an estimate how much it can collect from imposing withholding tax on online sellers.

“But, we’re expecting that ‘yung revenues natin diyan would be in the billions,” he said.

The BIR’s plan to impose withholding tax to merchants in e-marketplaces took effect on July 15, 2024.

Under its Revenue Regulation (RR) No. 16-2023, one-half of the gross remittances of e-marketplace operations and digital financial services providers to the sellers or merchants for goods or services paid through their platform shall be subject to a 1% creditable withholding tax.

The BIR, however, said the 1% withholding tax shall not be collected “if the annual total gross remittances to an online seller for the past taxable year has not exceeded P500,000” and “if the cumulative gross remittances to an online seller in a taxable year has not yet exceeded P500,000.”

The withholding tax is the amount withheld by a business in payments of goods or services directly remitted to the government on behalf of suppliers or employees.

The BIR defines “gross remittances” as the total amount received by an e-marketplace operator or digital financial services provider from a buyer or consumer for the goods and services sold by or paid to the seller or merchant through the platform of the e-marketplace operator.

Let me end this piece by asking you readers: What is your reaction to this recent development? Do you think the 1% withholding tax on online sellers will help the BIR collect tens of billions of Pesos more by the end of this year?

You may answer in the comments below. If you prefer to answer privately, you may do so by sending me a direct message online.

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BIR softens approach on social media influencers

May 17, 2024May 7, 2024carlocarrasco

Recently the Bureau of Internal Revenue (BIR) announced that it would soften is approach on social media influencers, according to a Malaya Business Insight news report.

In reference to the Revenue Memorandum Circular 97-2021 issued by the BIR, social media influencers are defined as those who derive their income from the following sources: YouTube Partner Program; sponsored social and blog posts; display advertising; becoming a brand representative/ambassador; affiliate marketing; co-creating product lines; promoting own products; photo and video sales; digital courses, subscriptions, e-books; and podcasts and webinars.

To put things in perspective, posted below is an excerpt from the Malaya Business Insight report. Some parts in boldface…

Bureau of Internal Revenue (BIR) commissioner Romeo Lumagui Jr. is opting to take a “soft” approach on influencers, giving them a chance to cooperate and comply first with the tax agency’s regulations.

When asked by reporters if the agency is currently working on possible cases to be filed against non-compliant social media personalities, the BIR chief said: “Not yet. I don’t want to file a case yet because I want to take a soft approach first.”

“We may do an audit, but we won’t file a case yet. As long as they are willing to comply, we will help them (to comply),” Lumagui said.

During the previous administration in 2021, the BIR started cracking down on social media influencers and probed an initial 250 individuals to check their tax compliance. Some major online personalities, however, deactivated their accounts after the release of a related circular during the said year.

Lumagui said he has extended his invitation to the association of these social media personalities to sit down and discuss with them their concerns and how the industry can be more tax compliant.

“We would just like to educate them on their obligation,” the BIR chief said.

Lumagui also said he has been in touch with individual influencers who are correctly paying their taxes, and asked them to encourage their colleagues to do the same.

According to Revenue Memorandum Circular 97-2021, social media influencers should pay income tax and percentage tax or, if applicable, the value-added tax, as mandated under the National Internal Revenue Code and other existing laws.

Let me end this piece by asking you readers: What is your reaction to this recent development? Do you think this latest move by the BIR will encourage social media influencers to come out and cooperate?

You may answer in the comments below. If you prefer to answer privately, you may do so by sending me a direct message online.

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BIR extends deadline for online businesses to transition to new withholding tax system to July 14, 2024

April 29, 2024April 16, 2024carlocarrasco

Recently the Bureau of Internal Revenue (BIR) announced that July 14, 2024, is the new deadline for online businesses to transition to the new withholding tax system, according to a GMA Network news report. Previously the deadline was April 15, 2024 and online businesses with annual earnings of over P500,000 were to be covered by the 1% withholding tax.

To put things in perspective, posted below is an excerpt from the GMA news article. Some parts in boldface…

The Bureau of Internal Revenue (BIR) announced Tuesday that it has extended the deadline for online merchants to transition to the new withholding tax system by 90 days.

According to the agency, Revenue Memorandum Circular No. 55-2024 extended the transitory period for compliance with Revenue Regulations (RR) No. 16-2023 until July 14 after considering the private sector’s request on the implementation.

“This 90-day extension of the transitory period under RR No. 16-2023 shows the BIR’s commitment in listening to the voice of the private sector,” BIR Commissioner Jun Lumagui said in a statement.

“This is part of my administration’s thrust on Excellent Taxpayer Service. We hear the thoughts of the private sector, and if the same is reasonable, then we make policy adjustments for the benefit of the Filipino people,” added Lumagui.

Under RR No. 16-2023, one-half of the gross remittances of e-marketplace operations and digital financial services providers to the sellers or merchants for goods or services paid through their platform shall be subject to a 1% creditable withholding tax.

The BIR said that the online transactions industry has experienced growth during and after the coronavirus pandemic but it appeared that many online sellers were not paying their share in taxes.

RR No. 16-2023 was signed by Lumagui and Finance Secretary Benjamin Diokno in December 2023.

Let me end this piece by asking you readers: What is your reaction to this recent development? Do you think that the new deadline will give all online businesses here in the Philippines enough time to transition into the new withholding tax system?

You may answer in the comments below. If you prefer to answer privately, you may do so by sending me a direct message online.

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BIR clarifies that small online sellers are exempted from 1% withholding tax

February 6, 2024January 30, 2024carlocarrasco

In response to growing concerns related to the recent implementation of the 1% withholding tax on online merchants with annual earnings of over P500,000, the Bureau of Internal Revenue (BIR) clarified that small online sellers are exempted from it, according to a BusinessWorld news report.

To put things in perspective, posted below is an excerpt from the BusinessWorld news report. Some parts in boldface…

THE BUREAU of Internal Revenue (BIR) on Monday clarified that small online sellers are exempted from the payment of the creditable withholding tax imposed on online marketplaces but would still need to register their business.

“Small-scale online sellers are exempted from withholding tax. The BIR is sympathetic to small businesses in its approach to taxing online sellers/merchants,” BIR Commissioner Romeo D. Lumagui, Jr. said in a statement.

BIR Revenue Regulations No. 16-2023, which took effect on Jan. 11, imposes a withholding tax of 1% on one-half of the gross remittances by e-marketplace operators and digital financial service providers to the sellers or mer-chants for the goods and services paid or sold through their platforms or facilities.

The BIR said that the withholding tax is not imposed if the annual total gross remittances to an online seller for the past taxable year has not exceeded P500,000; if the cumulative gross remittances to an online seller in a taxable year has not yet exceeded P500,000 or if the seller is duly exempt from or subject to a lower income tax rate pursuant to any existing law or treaty.

“For those who are above the threshold of P500,000 annual gross remittance, it is only fair that they will be subjected to withholding tax. We have to be fair to the retail sector and brick and mortar stores who are regularly pay-ing their taxes,” Mr. Lumagui said.

The tax covers marketplaces for online shopping, food delivery platforms, platforms to book lodging accommodations, and other similar online service or product marketplaces.

E-marketplace operators and digital financial service providers were given a 90-day transitory period to comply with the order.

The BIR in a separate circular said all online sellers and merchants need to register with the BIR and submit documentary requirements, even if their annual gross remittance is below the P500,000 threshold.

The circular also noted that sellers and merchants are not allowed to receive payments through a personal account and instead must use a BIR-registered account.

“If you have a business, you have to register and pay your taxes. It doesn’t matter if it’s an actual store or an online store. It is your responsibility to pay taxes like everyone else,” Mr. Lumagui said.

In a press conference last week, Mr. Lumagui told reporters that the measure will help the BIR better gauge the impact of the digital economy.

“We gave the online platforms a grace period of 90 days. With that, we are still checking on which are already capable of complying… During our discussions with online platforms, they’re cooperative. With this development, we’re hoping to get the entire picture on online transactions,” he said.

In 2022, the digital economy contributed P2.08 trillion or equivalent to 9.4% of the gross domestic product.

A report by Google, Temasek Holdings and Bain & Company showed that the Philippines’ digital economy is projected to reach as high as $150 billion by 2030.

The BIR also earlier clarified that the withholding tax is not a “new” tax as it is just a measure that will allow for an advance payment of income tax.

Let me end this piece by asking you readers: What is your reaction to this recent development? Do you think the newest clarification made by the BIR will end the confusion or concerns regarding the 1% withholding tax? If you are aspiring to sell items online, does the 1% withholding tax discourage you?

You may answer in the comments below. If you prefer to answer privately, you may do so by sending me a direct message online.

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BIR now capable of tracking social media influencers’ earnings

January 31, 2024January 24, 2024carlocarrasco

Social media influencers of the Philippines who make a lot of money should be aware that the Bureau of Internal Revenue (BIR) now has methods to track their earnings online, according to a Manila Bulletin news report. As far as the BIR is concerned, the influencers cannot hide from them.

To put things in perspective, posted below is an excerpt from the Manila Bulletin news report. Some parts in boldface…

The Bureau of Internal Revenue (BIR) has cautioned social media influencers considering tax evasion, emphasizing that the agency has mechanisms to accurately ascertain the earnings of all individuals involved.

BIR Commissioner Romeo D. Lumagui Jr. said the bureau has various methods to effectively obtain and verify the actual earnings of influencers by collaborating with their online platform providers.

“If others think they can hide it, they’re mistaken. We have mechanisms in place to obtain information from these entities about their revenues, so we can access that data,” Lumagui told reporters on Wednesday, Jan. 24.

The BIR categorizes social media influencers as individuals who generate income from their digital posts, identifying them as self-employed individuals operating as sole proprietors.

Despite the BIR’s best efforts, there have been numerous reports indicating that many social media influencers have chosen to ignore the bureau’s requests for voluntary compliance with tax laws.

In 2021, the BIR launched a campagin to address tax non-compliance among influencers, targeting around 250 prominent social media personalities who were believed to have earned substantial incomes and received various benefits.

Under Revenue Memorandum Circular (RMC) No. 97-2021, influencers are required to pay their income and business tax obligations, including either a percentage tax or a value-added tax.

However, the BIR faced a setback after several influential figures promptly deactivated their social media accounts for various reasons following the issuance of RMC 97-2021.

Let me end this piece by asking you readers: What is your reaction to this recent development? Do you think it is good for the nation that social media influencers should be compelled to pay the BIR the tax on their respective online income? Do you think the local money making social media influencers will come up with new ways to avoid taxation? Do you think the affected social media influencers will somehow rebel against the government by posting subversive content with the 2025 national and local elections in mind?

You may answer in the comments below. If you prefer to answer privately, you may do so by sending me a direct message online.

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VAT exemption in sale of residential properties hiked to P3.6 million

January 20, 2024January 17, 2024carlocarrasco

Those of you who own residential properties should be aware that the Bureau of Internal Revenue (BIR) formally announced that it has hiked the value-added tax (VAT) exemption in the sale of residential properties to P3.6 million (over P400,000 higher than previous), according to a Philippine News Agency (PNA) news article.

To put things in perspective, posted below is an excerpt from the news article of the PNA. Some parts in boldface…

The Bureau of Internal Revenue (BIR) has increased the threshold for value-added tax (VAT) exemption for the sale of house and lot as well as other residential dwellings from nearly PHP3.2 million to PHP3.6 million.

This, as BIR Commissioner Romeo Lumagui Jr. has issued Revenue Regulations 1-2024, compliant with Section 109 (P) of the National Internal Revenue Code.

The adjustment reflected the commitment to align the threshold with present values every three years using the consumer price index as published by the Philippine Statistics Authority.

“This timely increase in VAT exemption shows our commitment to Excellent Taxpayer Service. This increase in the selling price threshold, for VAT exemption purposes, of the sale of house and lot, and other residential dwelling from PHP3,199,200 to PHP3,600,000 gives testament to the BIR’s improved and updated services,” Lumagui said.

The BIR said its focus on Excellent Taxpayer Service aligns with President Ferdinand R. Marcos Jr.’s recent signing of the Ease of Paying Taxes Act.

The enactment of the legislation pushes for a modernized tax system, aiming to assist taxpayers in fulfilling their obligations, Lumagui said.

Let me end this piece by asking you readers: What is your reaction to this recent development? If you are a property owner, does the BIR’s act affect you? Do you think the raised VAT exemption will make a strong impact on many residential properties?

You may answer in the comments below. If you prefer to answer privately, you may do so by sending me a direct message online.

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