filipino business Archives - Taxumo

Facebook Ads

5 Ways To Make Sure Your Facebook Ads Reach The Right Audience

By | Digital Marketing, Small Business Tips | No Comments

Facebook Ads

If you’ve been using Facebook ads to drive customers and sales for your business, then I don’t have to tell you how great the targeting of the platform is.

Most of the time, advertisers are able to directly pinpoint their Facebook ads to their intended audience.

However, there are times when businesses have very specific offers targeted to a specific audience which cannot be easily targeted.

If you’re in this boat and you’ve been struggling to reach your exact audience, this is the post for you.

Below, we’ll discuss FIVE ways to make sure that your Facebook ads are able to reach the right audience: Read More

Important advice for aspiring Filipino entrepreneurs

Before You Start a Business, Focus on the Most Important Thing

By | New Business | No Comments

Important advice for aspiring Filipino entrepreneurs

I’ve been approached by numerous solopreneurs and home-based businesses for advice on how to sort out their bookkeeping.

The three most common hiccups are:

  • mixing personal and business-related funds;
  • having trouble segregating or splitting personal and business expenditures; and
  • ultimately, not having a clear picture of how much profit they’re truly making.

A younger me would have immediately put the accountant hat on, and fire off a number of tips and best practices, most simple would be maintaining a separate bank account exclusively for business and listing down all their regular expenses and identify those related to their business and pay those bills through that separate bank account.

But when someone approach me nowadays, the first thing I’ll do is congratulate them.

It’s takes a great deal of creativity, passion and courage for someone to put their dreams into action and leave their comfort zone (e.g. a stable corporate career.) That is awesome!

And the thing is, when you’re getting to point of being overwhelmed with the paper works, it’s highly likely that your business/vision has taken off.

It may still be at a low altitude, but you’ve gone through the first hurdle. So I always say: “You’re now having to deal with bookkeeping and taxes, which means you’ve made it.” (It’s sort of a good problem to have, one way of looking at it.)

What’s the point?

For aspiring entrepreneurs, my view is just make sure that your idea is groundbreaking/innovative/and revolutionary, and that you deliver the best product and service. The rest will be secondary.

Say you’re into baking. Competition might be stiff, but if you focus first on perfecting those irresistible pastries and creating that eye-catching brand/marketing. When your creation becomes a hit, I suppose it’s not too late to then shift your lenses onto your costs and expenses and look for cheaper suppliers for your ingredients? Yes, that stack of receipts and bills surely have to be taken care of, but when one’s business takes flight, the rest will be easy.

Do you want us to help you with business registration?

We’re trying out a new business registration service and you may qualify to be one of our pilot registrants! Details here:

Business Registration for Sole Prop, Freelancers, and Professionals

Should my business pay VAT?

Should my business pay VAT? A guide for Filipino small business owners

By | Tax Rules, Tax Savings | One Comment

Should my business pay VAT?

Is your business VAT registered? Maybe it’s time to change that. 

There’s been this clamor for years to have the income tax table indexed to inflation. The last time it happened? Never. It was never adjusted for inflation since the revised tax code took effect more than 20 years ago. But finally, people’s spirits have been lifted, with President Duterte mentioning lower income tax rates to come in his first SONA.

Speaking of inflation, there is one item that currently IS indexed to inflation, and has a huge impact not just on the taxes to be paid but also on the complexity of the accounting required: the annual revenue threshold that determines if one has to pay the 3% percentage tax, or the 12% VAT.

Most VAT taxpayers are not aware this threshold is adjusted (upwards) regularly. What would be a P1,500,000 annual threshold back in 2006 is now at P1,919,500, so some VAT taxpayers may now fall below this threshold and can slide down.

[EDIT: RA 10963 or the Tax Reform for Acceleration and Inclusion has increased the VAT threshold to P3,000,000.]

But what about the ability to apply input VAT and offset against output VAT? Is there a similar mechanism under percentage tax? The answer is no. But for most businesses and self-employed professionals, 3% would certainly be better, since the only scenario where VAT system would be preferred is when:

a) The margin in the business is really low.

b) The taxpayer has VAT invoices/receipts for ALL expenses.

Let’s put these into numbers. Say VAT taxpayer has an annual revenue of P1.5 million (excluding VAT) and P1.0 million in expenses (excluding VAT). The output VAT would be: P180,000 (P1.5M x 12%) and input VAT would be P120,000 (P1.0M x 12%) bringing NET VAT to P60,000.

But according to the BIR gov ph’s percentage tax rule. it’s a simple and lower P45,000 (P1.5M x 3%). A P15,000 difference! And that assumes all expenses were paid to VAT-registered suppliers/establishments, which is rarely the case. So if only P800k of expenses are from VAT suppliers, and input VAT is P96,000, and you’re looking a tax bill of P84,000 (P180,000 less P96,000).

And don’t get me started with all the bookkeeping stuff that goes away when one moves away from VAT. Because VAT taxpayers know what I’m referring to.

So what say you? Are you VAT-registered and perhaps now below the threshold? Say hello to percentage tax?

If you’ve decided to move away from VAT, here’s a guide on how to change your tax type to non-VAT: Tax Reform: Changing from VAT to Non-VAT

Looking for a better and more convenient way to file and pay for your small business’s taxes?