Small and medium enterprises (SMEs) received tax breaks amounting to billions of pesos for the first six months of 2018 alone under the Tax Reform for Acceleration and Inclusion (TRAIN) Act as they are now covered by a higher value-added tax (VAT) threshold and can now choose from two options to be able to pay lower income taxes, according to Finance Secretary Carlos Dominguez III.
A report by the Bureau of Internal Revenue (BIR) during an executive committee (ExeCom) meeting of the Department of Finance (DOF) showed that from January to June this year, VAT collections mostly in the BIR’s regional offices fell but collections from the percentage tax and income tax increased, indicating that many SMEs have now benefited from raising the VAT threshold from P1.9 million to P3 million under TRAIN.
Dominguez said increases in the percentage and income tax collections over the 2017 period indicate that SMEs and self-employed individuals that have not exceeded the VAT threshold are now opting to pay either the 8 percent income tax on gross sales or receipts and other non-operating income or the percentage tax and the graduated income tax rates under TRAIN.
From January to June this year, VAT collections amounted to P63.217 billion in the BIR’s regional offices, lower than last year’s P72.813 billion reported during the same period in 2017, according to BIR preliminary data reported during the Execom meeting.
However, percentage tax collections in the regions rose to P18.079 billion from P12.130 billion in 2017. The January-June figure for percentage tax collections also exceeded the BIR’s goal of P14.803 billion for this period. Income tax collections in the regions, meanwhile, also rose to P207.332 billion from P206.454 billion in the same period in 2017. This also surpassed the BIR goal of P198.618 billion for this period.
For the entire country, income tax collections rose to P500.585 billion for the January-June period, higher than the BIR goal of P450.375 billion and the 2017 collection of P489.456 billion.
Total VAT collections for January to June was P179.951 billion, short of the BIR goal of P222.419 billion, but slightly higher than 2017’s 178.435 billion.
January-June 2018 total collections from the percentage tax rose to P44.158 billion, higher than the BIR goal of P43.744 billion and the 2017 collection of P38.241 billion for the same period.
More on TaxReform News
AmCham joins biz community support for tax reform →Date Posted: September 29, 2017
The American Chamber of Commerce of the Philippines (AmCham) has joined the long list of … Continue reading AmCham joins biz community support for tax reform
CTRP to exempt 4.6-M Filipinos from income taxation →Date Posted: February 22, 2017
Some 4.66 million taxpayers, or more than double the current figure of 1.8 million, will … Continue reading CTRP to exempt 4.6-M Filipinos from income taxation
DOF fine-tuning CTRP Package 2 Plus to ensure ‘solid, well-consulted bill’ →Date Posted: January 30, 2018
The Department of Finance (DOF) is now finetuning certain aspects of Package 2 Plus of … Continue reading DOF fine-tuning CTRP Package 2 Plus to ensure ‘solid, well-consulted bill’
Over 1,000 entrepreneurs take part in ‘Sulong’ regional forumsDate Posted: April 29, 2019
More than 1,000 entrepreneurs, mostly representing small and medium enterprises (SMEs), were consulted by the … Continue reading Over 1,000 entrepreneurs take part in ‘Sulong’ regional forums