Archive for Taxation
Tax evaders beware, your Facebook might give you away
Be careful of what and how much you share on your Facebook and Twitter account, your seemingly harmless tax rants and shout-outs might be more buzzworthy than you think.
Bureau of Internal Revenue (BIR) Commissioner Kim Henares stated in an early July interview that complaints are being posted on her Facebook regarding tax cheats and evaders, and they are considering these reports as leads to tax crimes. With the Philippines ranking fourth in the Fitch Ratings list of countries with the worst tax collection procedure, the use of social networking sites to crack down on tax evasion might help boost revenue collection. The country is reported to have at least 14.6 million Facebook users, according to Checkfacebook.com.
Banco de Oro market strategist Jonathan Ravelas says that this move will keep people in check, although its visible impact will only be seen over time. With tax revenue plummeting to 12.8 percent of gross domestic product in 2009 from a record 17% in 1997, the BIR aims to raise collection to at least 15% this year without waiting for new or higher tax implementations in support of President Aquino’s pledge to boost revenue and wipeout corruption.
“This is a key rating weakness in the Philippines,” said Andrew Colquhoun, head of Asian sovereign ratings for Fitch, said in an interview. “We remain convinced an enforcement effort can raise revenue.”
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Get your tax basics and updates in our popular Comprehensive Tax Seminar! Sign up now to join the Aug. 5, 2010 (Thursday) schedule or click here to see our available Comprehinsive Tax Seminar Promos.
Avoid the most common, costly tax errors committed
As the saying goes, there are only two certain things in life: death & taxes. While both are unavoidable constants in life, the stress involved in the latter can be controlled. For employees, the deduction of taxes from salary alone induces a groan every cutoff but for business owners and finance managers, tax-related burdens run deeper. Even the smallest miscalculation or missing reportorial document could cause grave penalties that could halt business operations.
Feel like you need updates on the latest tax developments? Attend our Comprehensive Tax Seminar on August 9, 2010 and allow us make the tax aspect of your business or profession a breeze. Topics covered are but not limited to:
- Withholding Taxes
- Local Business Taxes
- Final Withholding Taxes
- Fringe Benefit Taxes
- The New VAT Law
- Updates on INCOME TAXATION
- Penalties and how to avoid them
- What to do when issued a Letter of Authority (LOA)
- Tax Reduction
A MUST for all tax professionals, bookkeepers, entrepreneurs, accountants, lawyers or anyone needing a firm understanding of the Philippine taxation system and its implications. Click here to reserve a seat now!
DOF to next President: Push for Tax Reforms
They say that in this world, nothing is certain except two things: Death & Taxes. In the face of economic instability, climate change and other inconvenient truths, that saying might be just about right. However, whoever takes the next presidential seat this coming May 10 hopefully ushers in more activities involving taxes (as opposed to deaths).
Finance Secretary Margarito Teves suggested last week 3 reforms that the next president should support:
- Rationalise fiscal incentives
- Restructure excise taxes on tobacco and alcohol products
- Simplify net income taxation
These three reforms would generate 33 billion pesos ($740 million) in the first year of implementation, he said. He also added that increasing the VAT rate and reducing corporate and personal income tax could initially be revenue neutral.
“Based on the discussions we had with the business community and foreign chambers, the following proposals will also be helpful in ensuring fiscal sustainability — increase in the VAT rate from 12 to 15 percent with a corresponding reduction in corporate and personal income tax,” he said in a business forum. “Depending on the formula, you can have a neutral impact in the beginning. But with a more efficient way of handling it, you can have a positive effect in the end or as we go along,” Teves told reporters on the impact of a VAT increase on revenue.
Sustaining an efficient revenue collection, however, still remains tedious as April collections, normally the biggest revenue month as annual taxes are due, are likely to be lower than target due to the impact of last year’s typhoons.
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Mind your P’s and Q’s when processing your Tax Returns! Attend our new Tax Preparers Program Workshop and avoid committing the common mistakes in tax return preparation, filing and payment. Know your different taxes, BIR forms and PEZA and BOI reportorial requirements. A must-attend workshop for Tax Accountants, Bookkeepers or anyone involved in the mentioned processes. Find out more details or pre-register online now!
Why even small business need effective payroll administration
Some small businesses may be hesitant to hire a full-time accountant or single out a member of their HR personnel to focus on the task of managing their company’s payroll system. This could be due to the lack resources, and also the fear that this task might divert the much-needed time and effort that the company needs to focus on its core competencies. But did you know that 99% of BIR assessments come from inconsistencies in payroll activities, most especially payroll taxes?
A way to curb that scenario before it occurs is to purchase software with built-in payroll functions –which most of the larger companies can afford. But for smaller organizations, particularly those with less than approximately 25 employees, it might be a better idea to invest in a good accountant or payroll administrator to personally see through their payroll activities. After all, investing in having flawless transactions is much cheaper than having to deal with tiny errors that contain costly consequences.
We can help you get started in improving your payroll methods! Attend our Effective Payroll Management Seminar and learn the ropes on handling day-to-day payroll issues that go beyond just handing out employee salaries. If you’re a payroll manager, accounts manager, HR officer or staff member dealing with or supervising this vital process, then this seminar is for you. Click here to find out more details and to see how you can register online!
Tax Preparers Program Workshop now offered
Tax preparation is more than just a series of steps and processes. Groups and individuals involved in this process know this very well, and even the most seasoned tax preparers feel the tension as deadlines get closer.
Entrepreneurs Accounting Academy gladly introduces the Tax Preparers Program Workshop, the essential workshop for tax accountants, tax preparers, bookkeepers, administrative staff members preparing tax returns, PEZA and BOI reports or anyone in need of knowing how to carry out these vital processes.
Our seasoned facilitators will help you become equipped in theory and practice, help you formulate a tax calendar, orient you on the different ways of tax returns filing and payments and keep update you on the SEC, PEZA and BOI reportorial requirements.
Curb unnecessary stress that may come your way when accomplishing these tedious tasks. Click here to see our quick and easy registration procedure.
Philippine tax system: One step forward, two steps back?
Filipinos are regaining an optimistic look at the business sector despite depictions of corruption in media, according to a new survey on business conducted by Social Weather Stations (SWS). In this survey, 40% of managers say access the Anti-Red Tape Act might have helped improve the access to public information in the last five years. The SWS survey had shown many enterprise managers find the annual renewal of local business permits and licenses is easier now compared to three years ago. According to 70 percent of enterprise managers in Metro Davao, 67 percent in Cagayan de Oro/Iligan City, 61 percent in Metro Cebu, 48 percent in CALABA, and 47 percent in Metro Manila, they are also having more ease with the filing of business permits.
However, a lot of work still needs to be done to improve tax collection. In the same study, results show that only one of five companies pay taxes honestly, while two out of three do not issue the proper receipts. “That is where we are worried. We must improve on our tax collection, and encourage tax payers, especially corporate taxpayers, to do their part,” said Deputy presidential spokesman Ricardo Saludo in an article published in Sunstar.com.ph. He also admitted that on the government’s part, tighter measures must be made to improve tax collection and address the problem of tax evasion.
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Don’t be a victim of your own taxes! Entrepreneurs Accounting Academy invites you to sign up for its Comprehensive Tax Seminar. Packed with real-life cases and scenarios, this seminar goes beyond the theoretical framework and gives you tips on how to avoid the most common penalty-inducing tax errors committed. Click here to find out more about the seminar.
BIR launches tax drive for 2010
The Bureau of Internal Revenue (BIR) kicked off its 2010 tax campaign led by Finance Secretary Margarito Teves last Friday, Feb 5, in an effort to raise P830 billion this year. Commissioner Joel L. Tan-Torres disclosed that various efforts made to ease the burden of taxpayers when filing 2009 income tax returns (ITR) and also to make it easier for banks to process them.
On their part, the process has done away with the requirement of multiple stamping of ITRs and attachments by banks and except on the page of audit certificate and the three copies of the returns. On the taxpayers’ side, Tan-Torres requested individual and corporate taxpayers not to wait until the last minute when filing their returns in order to avoid the hustle that normally occurs during rush hours. The BIR chief also stressed that like in the past, the April 15 deadline will not be extended and late filers will be slapped the usual fines and surcharges.
Tan-Torres expressed optimism of hitting the huge collection target for the year as evidenced by the more than P3 billion collection surplus last month. He did not give actual figures, saying that they were still tentative.
Having trouble with your taxes? Entrepreneurs Accounting Academy invites you to attend one of its Comprehensive Tax Seminar, one of its most popular seminars on hand. This comprehensive 1-day seminar is packed with updates and real-life scenarios that would shed a brighter light on the matter of taxes. This seminar is targeted at Administrative officers involved in tax compliance, Bookkeepers, Accountants, Tax Professionals, Lawyers and business owners who would like to know about their taxes. Click here to register and find out more about the seminar!
US calls on WTO over liquor tax dispute with Philippines
Last Week, the United States said that it was hauling the Philippines to the World Trade Organization (WTO) over a dispute on taxes imposed on imported whiskey and gin, which were significantly higher than that of domestic distilled spirits according to the US Trade Representative’s office (USTR). “Although the United States has raised this issue many times, the Philippines continues to tax distilled spirits from the United States at much higher rates than distilled spirits produced in the Philippines…we urge the Philippine government to eliminate that discrepancy and level the playing field for our exports immediately.” USTR Ron Kirk said.
Regarding the said matter, WTO has rules that generally bar members from discriminating between imported and domestic products in their tax regimes. The US government has raised concerns over the issue with the Philippines in the past several years, both bilaterally and in WTO forums. In addition, the European Union had requested WTO dispute settlement consultations on these taxes in July 2009, and the United States joined these consultations and participated in meetings between the EU and the Philippines in October.
The first step in a WTO dispute is for both parties to consult formally. If consultations fail to yield resolve to the dispute, the United States will be entitled to request that a panel be established to determine whether the Philippines is compliant with WTO regulations.
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Entrepreneurs Accounting Academy continues to offer a Comprehensive Tax Seminar. This seminar is constantly updated to reflect the latest tax developments that affect individuals, businesses, partnerships and corporations. Packed with real-life cases and essential tax information, this is your chance to straighten out the confusion. Interested? Sign up here.
A look back at COA’s audit of Meralco’s books in ‘08
Every year, as the end of audit season approaches, business operations are either breathing a sigh of relief or scrambling to make sure that their financial statements, tax declarations and various documents and files are flawless. After all, no one wants to be investigated for non-compliance with the pertinent tax laws, rules and regulations.
Looking back at the case of Manila Electric Co. (Meralco) last 2008, we can see that even the biggest of corporations are subjected to scrutiny when it comes to the accuracy of its books. The Commission of Audit (COA) was issued to audit Meralco’s books back in September 2008 when the Energy Regulatory Commission (ERC), issued a directive to Meralco to be subjected for auditing. The ERC’s order was in response to COA chairman Reynaldo Villar’s request asking ERC to direct Meralco to open its books in relation to a Supreme Court (SC) order on the power firm’s rate increase in 2003. Meralco’s then Vice President for Corporate Communications Elpi Cuna Jr. agreed without hesitation saying that the company “welcome(s) the move of the Energy Regulatory Commission (ERC) to request the Commission on Audit or COA to audit Meralco to once and for all show to the public that Meralco is transparent in so far as conducting its business is concerned.”
Just last November 2009, COA has announced that they will be submitting the audit results soon. “It could be filed anytime soon. We’re still waiting for the transmittal of the documents,” said ERC executive director Francis Saturnino Juan. Meralco head of utility economics Ivanna de la Peña said that all aspects, even generation and sourcing, were checked as a response to COA scrutinization of the financial statements for the years 2004 and 2007 conducted ocular inspection of the company’s facilities and assets. “They (COA) will submit the report to the ERC. It would likely be that the ERC will notify us the outcome of the audit,” de la Peña said. The Meralco official, however, also said that they are confident that the audit is in order.
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Keep track of your taxes, or you may become BIR’s RATE program’s next target
With just a few months before audit season ends, it might be a good time for corporate taxpayers to polish their filing of annual income tax returns and make sure that financial statements are squeaky clean. No one wants to be accused of tax evasion, or face the consequences of even the smallest tax compliance errors that will later on come back as a massive problem.
In an article written by Ryan E. Cabello for Philstar.com, the most common error of a corporate taxpayer is the belief that financial audits and tax compliance reviews are synonymous when in fact, they have their own respective objectives. Not all financial statements that have been audited by their independent external auditors can automatically be considered “tax compliant”. Cabello writes,
With that said, it is safe to say that that tax compliance is a logical consequence of an independent financial audit, and not a reciprocally synonymous. To confuse the two as otherwise might make one a target of the Bureau of Internal Revenue’s (BIR) Run After Tax Evaders (RATE) Program. This program, which began in 2005, has been intensified, aiming to reach the goal of initiated by the Department of Finance (DOF) and BIR to investigate and prosecute criminal violations of the National Internal Revenue Code (NIRC) of 2007.
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Having trouble with your taxes? Don’t take the risk of overlooking even the smallest details. Entrepreneurs Accounting Academy offers a Comprehensive Tax Seminar, which is constantly updated to reflect the latest tax developments that affect individuals, businesses, partnerships and corporations. Packed with real-life cases and essential tax information, this is your chance to straighten out the confusion. Interested? Sign up here.
