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The Philippines made remarkable progress in the ranking of the World Bank’s Doing Business (DB) 2020 Report, from ranking 124th rising by 29 notches and landing at 95.

Offsetting measures, upsetting measures

The tax reform is well underway, but just as it had in 2018, it hit a snag yet again. In fact, it hit the same snag it had back then.

Doing Business: How did we actually do?

The Philippines celebrated a 29-place jump in its Doing Business score in the World Bank’s 2020 report, having raised the country’s ranking from 124 to 95.

Building on the BIR’s achievements

The Bureau of Internal Revenue (BIR) recently celebrated its 115th Anniversary, and with it comes the time to recognize its performance. While the general perception of corruption remains, it is important not to forget the BIR’s active efforts. Praise what is right and criticize what is wrong.

Corporation or sole proprietorship? A tax perspective

In planning to start a business, deciding between a corporation and a sole proprietorship is one of the first considerations. The differences used to be clear-cut -- corporations for large businesses, sole proprietorships for smaller ones. For the most part, that remains true.

What’s new on April 15?

April 15 is the deadline for the most important type of tax payment -- the annual filing of income tax returns (ITRs). Almost all registered taxpayers are required to pay this tax, with only a few exceptions. For the government, the income tax is where the bulk of the Bureau of Internal Revenue’s (BIR) collections come from.

Revolutionizing tax filings and payments

Low tax rates can mean high revenue collections if implemented and administrated correctly. But to do that, the taxes first need to actually be collected. Based on the BIR’s 2017 Annual Report, most of the tax collections for individuals came from withholding taxes on wages. Of the P390.85 billion collected from individuals, P317.74 billion came from the withholding tax on compensation income earners.

Learning from Other Tax Systems

The Comprehensive Tax Reform Program seeks to implement a fairer, simpler, and more efficient tax system. Toward this end, it has implemented relatively lower tax rates under Tax Reform for Acceleration and Inclusion (TRAIN) Law and also targeting to lower tax on corporate income under Tax Reform for Attracting Better And High-quality Opportunities (TRABAHO). Unfortunately, this comes at the cost of increasing other tax rates.

Modernizing Tax Administration

Instead of increasing excise taxes on fuel and coal which has inflationary impact on consumer goods, the government must prioritize modernizing tax administration to broaden taxpayer base and increase voluntary compliance.

TRAIN 2: A tax reform for businesses

PACKAGE 2 of the Tax Reform for Acceleration and Inclusion (TRAIN) has been met with protests, especially from the Philippine Economic Zone Authority (PEZA) and the Board of Investments (BoI). One of the notable features which remains to be the most controversial portion of the Comprehensive Tax Reform Program is the incentive reform.

Disruption in taxation

Nothing is certain but death and taxes, while the only constant is change. Who doesn’t know that? And yet, it still hurts like the first...

Higher pay for tax collectors

With the implementation of the Tax Reform for Acceleration and Inclusion (TRAIN) law, a Certified Public Accountant (CPA) earning a net of P14,000 in...

Citizen tax planning

Any day from now, we expect the Bicameral Committee to submit the final version of the Tax Reform for Acceleration and Inclusion (TRAIN) package...

Restructuring our income tax system

The Duterte administration has taken a bold step in prioritizing to reform our two-decade-old tax system on its first year (not 100 days). Under...