Angara: TRAIN to make doing business easier for entrepreneurs
The simplified tax filing and payment process under the recently enacted Tax Reform for Acceleration and Inclusion (TRAIN) law will make doing business easier for small entrepreneurs, Senator Sonny Angara said on Wednesday.
Angara said that under the Republic Act 10963 or the TRAIN compensation, income earners as well as professionals and selfemployed individuals with small businesses, whose annual taxable income do not exceed P250,000, are exempted from income taxes and are no longer required to file income tax returns (ITRs).
Currently, even if self-employed and professionals have no tax due, they are still required to file ITRs for record and monitoring purposes of the Bureau of Internal Revenue (BIR).
Those with annual gross sales or earnings of above P250,000 but below P3 million can choose between a flat tax of 8 percent or the schedular personal income tax rates where they can deduct their business operation costs and expenses.
“Marami talaga sa ating self-employed at professionals ang nahihirapang makasunod sa mga regulasyon ng pagbubuwis. Minsan nga, mas malaki pa ang gastos nila sa pag-comply sa tax rules kesa sa mismong babayaran nilang buwis. Kaya minabuti nating padaliin na ang sistema lalo na para sa mga maliliit na negosyante,” Angara said.
The TRAIN also increases the value-added tax (VAT) threshold from the current P1.9 million to P3 million.
This means that those earning below P3 million will be exempt from the 12 percent VAT and will be subject to the 3 percent percentage tax only if they opt for the schedular personal income tax rates.
In the present, VAT and percentage tax are filed and paid every month. With the tax reform, such filing and payment will be made quarterly.
The TRAIN law likewise provided that only those who have annual sales or earnings of above P3 million — from the current P600,000 — will be required to have their books of accounts audited by certified public accountants.
The tax reform law also mandates the BIR to cut the ITR form from the current 12 pages to four pages only.