MODULE 9:

Taxation
Presented by:
ATTY. RANDY B. BLANZA, CPA, MPA, CESO

May 9, 2019
Naga City, Camarines Norte
BUSINESS MODEL CANVASS
Difficulties in tax compliance
• Ahead of the April 15 income tax deadline, the BIR
came out with advertisements in the media touting
the projects the government was able to
accomplish from its tax collections.

• The BIR also urged taxpayers to file their income tax

returns early to avoid the inconvenience and hassle
usually characterizing last day filings.
• In spite of the BIR’s information drive, however,
majority of Filipinos look at taxes as a necessary
evil, or something to be avoided and evaded
whenever possible, rather than an act of
patriotism.
• This is not surprising because no reasonably
minded Filipino enjoys seeing his hard-earned
money going to the pockets of corrupt senators,
congressmen and other government officials.

• On top of this disincentive, the payment of taxes

has become an ordeal of sorts due to bureaucratic
rules and procedures.
COMPLICATED
• It is a basic principle in taxation that “taxes should be
enforced in a manner that facilitates voluntary
compliance to the maximum extent possible.”
• Meaning, the rules on taxation must be written in a
manner that they can be easily understood and
complied with by the taxpayer without outside
assistance.
• In the ideal situation, the taxpayer should be able, on
his own, to figure out how much in taxes he has to pay
for income earned from his labor or business and can
do so with the least expense in time, money and effort.
• Sadly, it is the other way around here. Our tax laws
are written in such a way the ordinary taxpayer will
suffer a nose bleed if he tries to make odds and
ends about their sense or meaning.

• The rules on taxation can be daunting even to

lawyers and accountants unless tax law is their field
of expertise or they took special courses to
understand its nuances.
• Except for the BIR form for purely compensation
income that is quite simple, the other BIR forms
require the assistance of somebody knowledgeable
with the intricacies of taxation.
CORRUPTION
• THIS BIR form is supposed to be the simplest among
countless BIR forms that have to be filed and on the
basis of which certain tax payments have to be made
within specific periods of time under pain of penalties
and surcharges.

• If the businessman-taxpayer does not want to run afoul

with the law or get a visit from BIR examiners (both
authorized and unauthorized), he has no choice but
engage the services of an accountant or lawyer with
sufficient expertise in taxation to assist him in the
preparation of his tax returns.
• As if the accomplishment of tax returns is not stressful
enough, the taxpayer has to contend with the
requirement of submitting, depending on the nature of
his business, monthly, semestral and annual reports to
the BIR or, where applicable, to other regulatory
offices.

• The volume of paperwork for BIR filings has reached a

point that some companies, in an effort to make sure
they are compliant with requirements, have to create a
staff dedicated to attending to all matters solely related
to the BIR.
• It’s probably only in the Philippines where its
citizens are willing to pay their taxes but the
government throws in bureaucratic obstacles to
make that process tedious and stressful.
How can I register my company in
BIR?
How do I get a BIR receipt?
How to register for an Official Receipt

• Fill up 3 copies of BIR Form 1906, or Authority to

Print (ATP) Official Receipts, Invoices, and other
Commercial Invoices. ...
• Submit your requirements to your RDO. ...
• Submit your ATP to an accredited BIR printer.
• Wait for at least 10 to 15 working days for the
release of your receipts.
INCOME TAX
WITHHOLDING
TAX
BUSINESS TAXES
TYPES OF BUSINESS TAXES
• VALUE-ADDED TAX (VAT)
• PERCENTAGE TAX
• EXCISE TAX
What are percentage taxes?

• Percentage Tax is a business tax imposed on

persons or entities who sell or lease goods,
properties or services in the course of trade or
business whose gross annual sales or receipts do
not exceed P3,000,000 and are not VAT-registered.
What is creditable percentage tax
withheld?
• One of the withholding tax schemes adopted in the
Philippines is the creditable withholding tax (CWT)
system. ... Any excess of the tax income due on the
return over the CWT withheld should then be paid
by the recipient to the Bureau of Internal Revenue
(BIR).
Who Can File BIR Form No.
2551Q?
If you haven’t opted for the 8% Income Tax Rate on
Gross Sales / Receipts Option, then your COR
(Certificate of Registration) should indicate that you
are required to file for percentage tax. With the
manual process, BIR Form No. 2551Q should be filed
in triplicate by:

• Non-VAT taxpayers with gross annual revenues not

exceeding P3M
How to Calculate Quarterly
Percentage Tax?
• As a sole proprietor, quarterly percentage tax is
calculated by multiplying 3% of your quarterly gross
income receipts.

• By “Gross Receipts”, this would mean all the

earnings / revenues you have actually received
from your client / business.
When and Where You Can You
File?
• BIR Form No. 2551Q shall be filed and the tax shall be
paid within twenty-five days after the end of each
taxable quarter. So, from the 15th of April, July, and
October, the deadline has been moved to the 25th of
the same months.

• You shall do this with any Authorized Agent Banks

(AAB) of the Revenue District Office (RDO) where you
are registered or are conducting business. In case there
are no AABs, then this form shall be filed with the
Revenue Collection Officer (RCO) of your RDO.
How Can Payment Be Made?
• Payment can be made manually or electronically. If
you’re opting for manual payment, you can do what
was mentioned above. Head to the AAB located in
your area that is within the jurisdiction of the RDO
or file your return with the RCO.

• Online payment, on the other hand, can be

accomplished using GCash Mobile Payment,
Landbank’s LinkbizPortal or DBP’s Tax Online.
What Penalties Will Be Imposed
Upon Failure of Filing?
The taxpayer will incur an interest of 25% plus
surcharge plus compromise fee in cases where
he/she:

• Failed to file and pay their quarterly percentage tax

return on or before the deadline
• Filed a return with the wrong person or officer
• Failed to pay the full or part of the amount of tax due; or
• Failed to pay deficiency tax
The taxpayer will incur a surcharge of 25% plus
surcharge plus compromise fee in cases where
he/she:

• Willfully neglected to file the quarterly percentage

tax within the prescribed period; or
• Willfully made a false and fraudulent return
EXCISE TAXES
• Excise tax refers to an indirect type of taxation
imposed on the manufacture, sale or use of certain
types of goods and products.

• Excise taxes are commonly included in the price of

a product, such as cigarettes or alcohol, as well as
in the price of an activity, often gambling.
REPUBLIC ACT NO. 10644
AN ACT PROMOTING JOB
GENERATION AND INCLUSIVE
GROWTH THROUGH THE
DEVELOPMENT OF MICRO, SMALL
AND MEDIUM ENTERPRISES

( Go Negosyo act )
What is Republic Act No. 10644?
• Otherwise known as “Go Negosyo Act”, the Act
seeks to strengthen micro, small and medium
enterprises (MSMEs) to create more job
opportunities in the country. It was signed into law
by the President Benigno S. Aquino III on 15 July
2014, and which took effect on 13 January 2015.
The Department of Trade and Industry (DTI) issued
Department Administrative Order (DAO) No. 14-5
Series of 2014: “Implementing Rules and
Regulations for Republic Act No. 10644".
What is the basic policy of the
“Go Negosyo Act”?

• The basic policy of the “Go Negosyo Act” is to

foster national development, promote inclusive
growth, and reduce poverty by encouraging the
establishment of MSMEs that facilitate local job
creation, production and trade in the country.
What are the salient features of
the Go Negosyo Act?
• The law seeks to promote “job generation and
inclusive growth through the development of
MSMEs” in the country
• Establishment of “Negosyo Centers” in all
provinces, cities and municipalities to promote
“ease of doing business and facilitate access to
services for MSMEs within its jurisdiction”
• Technology transfer, production and management
training, and marketing assistance for MSMEs
• Establishment of a Philippine Business Registry
Databank under the Department of Trade and
Industry (DTI) to serve as a database of all business
enterprises in the country

• Establishment of a Start-up Fund for MSMEs “to

provide financing for the development and
promotion of MSMEs in priority sectors of the
economy to be sourced from the MSME
Development Fund and BMBE Fund

• Recomposition of the MSME Development Council

and its additional functions.
Who should establish
the Negosyo Centers in the locality?

• The MSMED Council shall encourage public-private

partnerships (PPPs) in the establishment and
management of Negosyo Centers. Coordination and
collaboration with the Local Government Units
(LGUs) and other agencies and organizations is
imperative to avoid duplication of efforts and to
foster coordinated action.
What are the functions of
the Negosyo Centers?
The Centers will be responsible for promoting “ease of
doing business and facilitating access to services for
MSMEs within its jurisdiction”, such as:
a) Business Registration Assistance
b) Business Advisory Services
c) Business Information and Advocacy
d) Monitoring and Evaluation
e) Perform such other functions that may be assigned by
the MSMED Council as germane to RA 10644 and other
related laws
Who can avail of the services
offered by the Negosyo Centers?

Any person, natural or juridical, having the

qualifications as defined in Section 3 c) of the
Republic Act No. 9178 may avail of the services.
What other forms of assistance will be
extended by the Negosyo Centers to
MSMEs?
A Start-up Fund for MSMEs shall also be established
“to provide financing for the development and
promotion of MSMEs in priority sectors of the
economy as specified in the MSMED [MSME
Development] Plan”. Likewise, a Philippine Business
Registry Databank (PBRD) shall be established under
the DTI to serve as a repository of information of all
business enterprises in the Philippines.
THANK YOU!
ATTY. RANDY B. BLANZA
0917-5129558
randybanza2014@gmail.com