Angara vows to study closely tax reforms to benefit small businesses
Sen. Juan Edgardo “Sonny” Angara. (File photo by ROMEO BUGANTE / Senate Public Relations and Information Bureau)
Sen. Juan Edgardo “Sonny” Angara vowed on Saturday to carefully study various proposals reforming the tax regime for self-employed individuals and professionals to further help small businesses.
He also welcomed the exemption of micro-business and marginal income earners from the proposed tax reform package.
“Exempting small businesses from tax will be a great relief for ordinary citizens,” Angara, chair of the Senat Committee on Ways and Means, said. “Through this, we will give them the chance to grow their businesses, which will also generate more jobs.”
The tax reform bill approved by the House of Representatives made a distinction between compensation income earners and the self-employed individuals or professionals.
It seeks to impose a one-time flat tax to self-employed individuals and professionals to encourage these hard-to-tax people to voluntarily and promptly comply with their tax obligations, according to the Department of Finance.
“What is important is to make the system easier to encourage people to pay the right amount of tax,” Angara said.
He added that he would thoroughly evaluate other proposals on how to reform the tax system for self-employed individuals and professionals to ultimately benefit small businesses.
Under current tax regulations, marginal income earners refer to self-employed individuals deriving gross sales or receipts not exceeding P100,000. They are exempted from paying business taxes such as VAT and percentage tax. But they are still subject to income tax.
Among the marginal income earners are farmers and fisherfolk selling directly to consumers, small sari-sari storeowners, carinderia owners, drivers, and operators of a single tricycle.
Micro businesses with assets below P3 million may be exempted from income tax pursuant to the existing Barangay Micro Business Enterprise law. But they must register first at the city office of the treasurer in their area.
“By automatically exempting, in effect, marginal income earners and micro businesses from income tax, we would finally afford them equal protection and benefits that the minimum wage earners have long been enjoying,” said the senator. /atm
