Tax-Reform_Using-an-Online-Tax-Calculator-in-the-Philippines

Tax Reform: Using an Online Tax Calculator in the Philippines

In the Philippines, there are online tax calculators that make it much more seamless for you to know your tax.

After all, taxes are a necessary aspect of being a Filipino citizen. Despite the many diverse sentiments with regards to how they feel about their income in relation to how the government utilizes paid taxes, taxes are ultimately aimed towards the greater good, sustainability, and the development of the country.

There are many ways to register, file, and pay taxes. It can be incredibly tricky navigating your way through making the most out of your income and saving the most on the taxes that you have to pay.

Whether you are a professional or whether you’re operating a business, you need to always make sure that you are within the legal parameters of tax compliance because you can very well be charged and penalized for failing to adhere to certain tax laws.

The entire process that encompasses the several requirements and procedures that have to do with tax settlement can be approached and done through a variety of means.

You can file and pay your taxes in person or with the government-issued e-systems. Calculating taxes can be a very daunting tax. Because of that, there are many that choose to hire public accountants to manage their tax numbers and facilitate the taxpaying process.

Thankfully, in this day and age, there are highly efficient and easy-to-use digital programs or online tax calculators in the Philippines that make the process of utmost convenience for all types of taxpayers.

Types of Taxes and Tax Rates

 

Types of Taxes and Tax Rates

There are many individuals that start a business who come from the world of regular employment. Registering a business with the Bureau of Internal Revenue (BIR) comes with many types of taxes that need to be complied with in order to legitimize a business operation.

Besides the general income tax, there are fixed tax forms that a business needs to pay during set periods of the year. Online tax calculators in the Philippines are fully equipped with all the different intricacies that go into the fixed rates of these taxes:

Monthly Tax

Businesses that are non-VAT are very-well aware of this tax as percentage tax. It is relatively simple in computation.

For the most part, this is about 3% of one’s gross monthly profit. Industries such as those that deal with the rental of property have a different set of tax rates that reach up to about 7%. But 3% is the usual rate for most industries.

However, for these non-VAT businesses, the tax rate is purely based on a businesses’ gross income and does not put expenses into consideration when calculating the final tax rate.

Donor’s Tax

For gifts and donation, this tax is imposed on two or more people living at the time of the gratuitous transfer of property.

For gifts and donation, this tax is imposed on two or more people living at the time of the gratuitous transfer of property.

This is known as the tax paid based on one’s total gross income on 3-month divisions of the year (January – March, March – April, July – September). October – December is already included in one’s Annual Income Tax—there needs to be no quarterly tax payment for these indicatory months.

VAT business has a more complex process of calculation for their specific tax rates.

Annual Income Tax

A business or professional that factors their expenses can either identify and itemize their expenses or take the Optional Standard Deduction (OSD) route.

OSD allows a business or professional to take their gross earnings and automatically deduct 40% of their expenses. There would be no longer a need to calculate various expenses on the different supplies and utilities used in communication and general operation.

Aside from this, you will still need to identify your personal exemptions. Regardless if you’re already married or single, you’re set to pay a fixed rate of Php 50,000 for every one of your children by December 31st of that year you are paying taxes for. This only applies to the first 4 children, the 5th child will no longer be included in this taxable income policy. The deadline for the annual tax is at the same deadline as the next year’s first quarterly tax deadline.

Other Taxes

Aside from these 3 primary taxes that businesses and professionals are required to pay, there are certain instances wherein one has to comply to monthly remittance of the taxes withheld from one’s contractors and landlords, monthly remittance of taxes withheld from a business regular employees as well annual renewal and registration fees.

Aside from the aforementioned fixed taxes, for a variety of other issues, below are some of the more specified types of taxes that business owners and professionals need to be aware of:

Capital Gains Tax

This tax is imposed on the gains that have presumed to be realized by the seller from the exchange and sale or the disposition of any other capital assets located in the Philippines, including forms of conditional sale.

Donor’s Tax

For gifts and donation, this tax is imposed on two or more people living at the time of the gratuitous transfer of property.

Income Tax

Tax for the accumulation of a year’s entire profit that is gained from profession, property, trades, offices, or as the tax on a person’s emoluments and the like.

Value Added Tax (VAT)

Business tax collected and imposed from the seller of the product in the course of trade or exchange on every sale of property, whether real or personal, the lease of properties as well as goods, real or personal, vendor services, etc. This type of tax is indirect and can be passed over to the buyer.

Expanded Withholding Tax

This type of tax covers services. A creditable tax that is prescribed for Filipino domestic payers and creditable against the tax due by the payee for the quarter year’s tax mark.

Withholding Tax on Government Money Payments

This type of tax is withheld by the government offices, instrumentalities, government-operated corporations as well as local government units, prior to making payments to the services and goods of suppliers.

Documentary Stamp Tax

This is a tax charged on instruments, documents, loan agreements, and papers that give evidence on the assignment, acceptance, sale, or transferring of rights, obligation, property, etc.

Percentage Tax

This type of tax is imposed on people or entities that lease or sell goods, services, or property whose gross annual sales or receipts in the course of business or trading are not VAT-registered and do not exceed Php 550,500.

Withholding Tax on Compensation

This tax is withheld from persons that primarily receive compensation income.

Final Withholding Tax

These are essentially withheld taxes that are prescribed only for certain payers is not creditable against the income tax that is due for the next taxable year of the payee. Withheld income tax constitutes the final and full income payment of the due income tax from the payee on that said income.

Fuel and Current Tax Policy Programs (2018)

Fuel and Current Tax Policy Programs (2018)

The implementation of President Rodrigo Duterte’s TRAIN or Tax Reform for Acceleration and Inclusion Bill makes significant changes from the previous 20-year old tax infrastructure in the Philippines. Duterte’s aim is to make the new tax system simpler and more equitable for the country’s greater development.

The Philippines is known for having one the highest tax rates in Southeast Asia. Currently, the country’s corporate tax is at 30% and is applied to all tax table resources and net incomes.

There have been several changes with the application of tax compliance rates. So it is important to utilize an updated and efficient online tax calculator in the Philippines.

One of the major elements of this new tax infrastructure is the increased price of fuel. Around 10% per liter increase will be made on fuel prices. However, with this new rule, public transportation fare prices will still not increase. This is made possible by the implementation of new programs.

Pantawid Pasada Program

This is the implemented program that is directed towards keeping fares at the same level by means of issuing public utility vehicle drivers cash cards with no increase from fuel tax addition laws.

Jeepney Modernization Program

This program is for the benefit of the general public as well as the environment. The Philippine government is in the process of improving jeepney engines by decreasing carbon emissions and increasing vehicle mileage.

Unconditional Cash Transfer

Php 300 per month will be provided by the Filipino government for households with low income in order to aid them in the moderate increase of market prices.

An Overview of Taxable Income

An Overview of Taxable Income

Facts on Taxable Income

The country’s current tax reform policies are aiming to reduce tax liabilities for most taxpayers in the country. There is a new policy directed towards waged workers earning less than Php 21,000 a month: The people that fall under this category are exempt from tax liabilities.

SSS Contribution

On a yearly basis, SSS issues a contribution table that breaks down how much employers and employees need to be paying for each month. This monthly contribution is determined by your salary range and where your compensation is categorized.

GSIS Contribution

For those working as government employees, they have the Government Service Insurance System instead of SSS contribution. The GSIS is a government agency that provides benefits and insurance services to officials or servicemen working in the government.

As personal share, members of constitutional and judiciary commissions pay #5 of their monthly compensation. With their employers paying 3% for life insurance coverage.

Philhealth Premium Contribution

This type of premium contribution is for members that are OFWs or individual paying members and those under sponsored programs registered under the Philippine Health Insurance Corporation. This organization provides a table for categorization on salary range to share ratios. But in general terms, the employer and employee are required to pay half.

Taxumo: Benefits of Using an Online Tax Calculator

Taxumo Benefits of Using an Online Tax Calculator

There are many underlying factors that you need to be fully aware of when handling your personal taxes. You must also be sure to constantly be updated with the current changes in terms of the country’s tax policies. For the most part, it can be highly technical when you try and attempt to fully grasp these formalities in order to save the most of your income.

Currently, the digital age has many different means to as to taking care of taxes, aside from doing it in person or hiring a public accountant. There are now different online tax calculators in the Philippines. You must always be sure to go with the best, efficient, updated, and legitimate online tax calculator program.

Taxumo is the best option for digital tax filing in the Philippines. It is the # 1 online tax calculator in the Philippines. It is an ideal choice for small-scale business owners, self-employed individuals, and freelance workers.

This highly-reputable online tax calculator in the Philippines frees you from the many stresses that arise from the newly-implemented tax laws and case-specific formalities.

With Taxumo at your side, you will know exactly how you much you need to pay. There will also be no need to deal with highly complex tax forms that take several minutes or even hours just to fill up. Taxumo is an online calculator that already has this aspect covered by providing auto-generated forms.

Another great aspect of Taxumo is that it is a tax filing system and online tax calculator in the Philippines that you can access anything and anywhere—even when you are traveling abroad. All the information regarding your taxes are covered with this great program. You no longer need to worry about standing in the long lines of offices and banks because with Taxumo—you can now pay your taxes on multiple payment channels such as through Paypal and different online banking methods!

Thanks to Taxumo, there is no longer a need to get acquainted and be very well-versed with the technicalities of accounting and taxes if you wish to handle these affairs on your own.

Click here to learn more and get started on the tax filing ease and convenience that Taxumo has to offer.

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