How to Deal with the Burdensome Tax Regulations in the Philippines

Tax or tax payment is a burden. Complying with several steps, processes and regulations before you can pay your taxes due is another and even a bigger burden.

If you’re a full-time or a pure employee, you only need to worry about the tax money which is automatically deducted in your take home pay. Generally, you don’t need to prepare your income tax return and file (pay) it with the BIR (accredited bank). Your employer does it all for you as a withholding tax agent.

If you’re a business owner or a self-employed professional, your tax story runs differently. Unlike a pure employee, you have to worry about finding the money to pay your tax, preparing the BIR forms for filing your tax, and getting through all the steps and processes to finally file and remit your taxes to the BIR.

How burdensome taxation is for self-employed taxpayers
The BIR, in their attempt to make the collection of taxes and the examination of accounts more efficient, has implemented several measures and regulations in the past. These include the payment of taxes in accredited banks and requiring some taxpayers to use the eBIRForms instead of the manual BIR forms.

Some RDOs also require taxpayers to get their BIR returns to be countersigned by a BIR examiner before they can file them and pay their tax dues in the bank. Imagine if the BIR office is far from the accredited bank in your area, it means more time to consume and effort to exert before you can completely pay your tax and comply with the BIR. Moreover, banks are usually a busy ground, thus, you have to queue for hours before you can finally remit your tax to the government.

If you are filing online through eFPS, good luck with the Internet speed in the Philippines. You’re lucky if you will not encounter any error. Aside from the tiring steps you have to go through to pay your taxes, you also have to survive the other compliance requirements that the BIR will implement from time to time.

For small business owners who need to give their full time to their business in order to grow, taxation can become a palpable hindrance. I hope that our government will place small business owners and entrepreneurs in an incubator to protect them and let them grow.

The BIR may say it’s too easy to comply with their 3 steps… register, file and pay. But we can only wish it’s as easy as 3 steps. The truth is… each of this step requires another several steps and processes, which you may find too inconvenient.

The bottom line is that the BIR is constantly implementing regulations to make their collections and investigations easier. But many of these regulations are not making tax payments easier for taxpayers. In order for our government to increase tax revenue, both collections (for BIR) and payments/filing (for taxpayers) should become easier. Do you agree?

How to Deal with the Burdensome Tax Regulations in the Philippines
Tax laws are enacted by our legislators while tax regulations are implemented by the DOF chief and the BIR commissioner. Actually, some of these regulations are not only giving hassles to taxpayers, they are also giving inconvenience to BIR personnel who are only doing their job and following orders from their leaders. In other words, all of these lie in our leaders, our congressmen, senators, DOF chief, and the BIR commissioner.

So what can we do to deal with the burdensome tax system and regulations in the country?

Well, no matter how hard it is to comply, we are bound to comply. We have to consider the following:

Comply first before you complain
We have to be proactive rather than reactive. We cannot disobey any law or regulation. Tax was created in favor of the government, not the taxpayers. If we disobey, in the end, we will only suffer from penalties and other charges. Hence, it’s best to comply first whatever regulation or requirement it is. Then after complying, you are free to burst out all your complain.

Hire a tax agent, bookkeeper or accountant
One of the most practical ways to deal with the BIR is to hire a bookkeeper or accredited tax agent to delegate all the tedious tasks in taxation so that you can focus in your business. If you’re making P2,000 or more in your business or practice of profession a day, and you are spending 3 days per month in complying all the requirements of BIR, then shelling out P2,000 to P5,000 per month for a bookkeeper is I think a good investment. You can also hire a tax consultant to make an annual tax budget or forecast for you so that you can already set aside money for paying your future tax dues.

Make the best vote
As I said earlier, all of these tax laws and regulations lie in the hands of our leaders. You cannot get mad with the whole BIR or its employees. They are just following orders from our leaders. If we want to change our tax system or have a tax reform, we have to elect better leaders who can create better tax laws and assign better tax commissioners.