THE ELECTRONIC FILING AND PAYMENT SYSTEM (EFPS) OF THE BUREAU OF INTERNAL REVENUE

The Bureau of Internal Revenue has further expanded the coverage of corporations required to file and pay taxes through the Electronic Filing and Payment System (EFPS) as per Revenue Regulations 10-2007. Revenue Regulations 10-2007 enumerates the following criteria for a corporation to be covered in EFPS:

1. Corporations with paid-up capital stock of Ten Million Pesos (Php.10,000,000) and above;
2. Corporations with complete computerized system;
3. All government bidders pursuant to EO no. 398 as implemented by RR 3-2005.
   

However, non-stock, non-profit corporations are excluded from the coverage of RR 10-2007.

The BIR's Electronic Filing and Payment System (EFPS) is a filing and payment gateway of the BIR which started online on July 1, 2001. It is a system developed and maintained by the BIR where the taxpayer can file through the internet, tax returns including attachments (if any) and accordingly pay the taxes due through Authorized Agent Banks' (AAB) internet banking facility. In this process, the taxpayer's representative will not have to go to the bank or the BIR office to file and pay it's monthly dues as this can be done online. The taxpayer will only have to log-on to the agency's link https://efps.bir.gov.ph/index.html.

Generally, any corporation though not covered by the RR 10-2007 - specifically those non-large taxpayers, may still opt to avail of the Electronic Filing and Payment System. The taxpayer's representative will only have to have their company be enrolled in the BIR's system. The taxpayer will only need to have an Internet connection, Internet Explorer Version 5 or higher, an email account, an a nominated bank account of an Authorized Agent Bank of the BIR.

The introduction of EFPS have lessened the load of compliance on BIR requirements. Through the EFPS, taxpayers will not have to wait on long lines just to have its payments be received as this can be done by simply a click of a mouse. Mispostings on the BIR forms are likewise brought to a minimum since the forms on the EFPS system are electronic and will compute for itself the tax due on the filed return. Having the option of validation, the forms will be counter-checked by the system itself. Taxpayers will not be stressed with on beating the clearing time of banks as transactions done before 10PM can still be considered as payment for such day.

However, we have just recently experienced the downside of an online system. Last April 15, 2008, the deadline for filing Annual Income taxes, the EFPS system of the BIR bogged down causing confusion and chaos to its users. This, I think, should be primarily be considered by the government. Since it now uses the advantages of the internet to aide in its regulatory and licensing functions, it should also invest whatever is needed for an internet system to work flawlessly.

IS INCOME FROM BLOGGING TAXABLE?

Is income from blogging taxable? My answer is Yes. Though there have been no concrete BIR regulation to address this question or at least I may have not found one, the basis of my opinion is Chapter 3, Section 23 of the National Internal Revenue Code which states that "A citizen of the Philippines residing therein is taxable on all income derived from sources within and without the Philippines". Therefore, it means that all revenue sources of income by a Filipino currently residing in the Philippines shall be subject to tax.

Though income from such endeavor is not subjected to withholding taxes, this shall still be within the bounds of Philippine taxation. This will then be the responsibility of the income earner or of the blogger in this case, to report to the government his earnings from abroad. And since there exists no employee-employer relationship between the publisher (blogger) and the advertising middlemen, this may be reckoned to as income from business and therefore, as just like the thousands of blogging enthusiasts in the country who also has a full-time job, will now be treated as mixed income earner.

As a mixed income earner, first and foremost, the taxpayer will now be required to register at their respective BIR District Offices as such. With it goes the responsibility to pay for the registration fee of Php.500 and may further be subjected to VAT if the annual income from blogging goes beyond Php.1,500,000 annually. It will however be a zero-rated VAT since the business is a sale to customers outside of the country. Further, the taxpayer will now be required to keep books of accounts or accounting records. There will also be additional reportorial requirement as a mixed income earner, which is the quarterly income tax and even monthly VAT reports if income is reaches the VATABLE SALE threshold.

BUSINESS PERMIT SYSTEM GUIDEBOOK FOR CENTRAL VISAYAS

I have discussed about the project in its pilot roll-out in my post "Business will soon be as easy as ABC". After barely a year of pilot run, it is now going to be implemented region wide in Central Visayas. The goal being, to limit the number of bureaucracy and red-tape in acquiring and processing business permits.

A Business Permit and Licensing System (BPLS) guidebook will be launched on July 9th which will soon be in place in 40 Local Government Units (LGU's) in Central Visayas. The book's title "Towards One Business Permit and Licensing System", is expected to assist LGUs shift to a more investor-friendly Business Permit and Licensing System. This will create a one-stop shop for new businesses acquiring the necessary permits and licenses.

As I have expressed on my earlier post on "Business will soon be as easy as ABC", I applaud the stakeholders of this project in seeing through that this be implemented to as many LGU as possible. This will definitely ease the stresses of starting-up a business venture and financially lessen the cost of business start-up. This will give entrepreneurs more time in developing better products and services than on non-value adding activities to consumers.

My Opinion on RA 9504 (The Republic Act ammending the National Internal Revenue Code Relative to the Withholding of Income Tax on Compensation)

I am quite interested on the forthcoming BIR's approved Revenue Regulation on RA 9504 , otherwise known as The Republic Act amending the National Internal Revenue Code Relative to the Withholding of Income Tax on Compensation. On July 1, the Bureau of Internal Revenue conducted a public hearing relative to the published revenue regulations draft in its national office. As I have previously highlighted on my post "Increased Tax Exemptions for Individual Taxpayers", the personal exemptions increased to Php.50,000 and Php.25,000 per dependent on the additional personal exemption. Further, this law exempts the minimum wage earners the requirement of withholding tax and increases the threshold of exemption as minimum wage at Php.10,000 per month (Php.120,000 per year) if the said amount is higher than the minimum wage of the locality. Exemption on withholding tax applies further to holiday pays, hazard pays, overtime pay and differential pay received by minimum waged earner. RA 9504 further increases also the Optional Standard Deduction (OSD) for those individuals who are earning business income from 10% to 40%.

But reading through the draft revenue regulation, these aren't as simple as it seems. Though this law clearly expresses it's intent to alleviate the low income earners of the working class Filipinos, this creates so much confusion on the part of the employers, more specifically - the cubicled Corporate Finance Warriors that will be tasked perform the requirement of the BIR. Here are my points:

1. Though the law provides for an increase in personal and additional exemptions to cover dependents, this will be effected on a pro-rated basis. The old personal and additional exemptions will still be effected on the individual's income covering January to June while the new exemptions will be for July to December. Even though this can simply be remedied with the aide of a spreadsheet, imagine the tediousness of the activity of dividing the personal and additional exemption by two and applying it to the individual's income and then accordingly adjust the taxes withheld to date. This in effect entails a preparation of an Alphalist of Employees as of June 2008.
   
2. Though clearly now identifies that all income received by minimum waged earners will be exempted from withholding taxes, the fact still remains that such exemption does not exclude the person from paying income tax. It is thus of this reason perhaps that the BIR now requires employers to compute for the taxes due of minimum waged earners for the period January to June and these shall then be deducted to the minimum-wage employee's payroll for July. Again, an Alphalist preparation on the part of the employer - Annual Alphalist preparation procedure by the company for a period covering 6 months. Further, this will require also an HR undertaking to explain such deduction to minimum-wage employees' payroll.
   
3. The law on exempting minimum-waged employees from withholding taxes is merely a temporary remedy and may even give burden to these minimum income level employees when the time to pay for income taxes arrives come April 15th. This temporary solution is clearly seen as such because of the provision on the draft regulation where minimum-wage employees are given the option to be subjected to withholding tax by requesting from employers "in writing" that the minimum-wage employee be deducted with withholding tax.

In my conclusion, the law simply fortifies that Taxes are the bloodlines of the Government. Though one may be exempted from withholding taxes, this does not exclude the same from income tax payment. The law, in effect, could only be highlighted with this features: Increase in Personal and Additional Exemptions (but then again, this is still on a pro-rated basis for 2008). Stating the exemption of minimum-waged earners from income taxes and increasing the 40% OSD on individual business-income earners are but moth and academic.

New Schedule of Submission of Philhealth Remittance Reports (RF-1)

Beginning 3rd Quarter of 2008, the submission of the revised remittance reports (RF-1) of the Philippine Health Insurance Corporation shall be on on or before the 15th after the applicable month. The old schedule of submission of remittance reports will be followed only until the 2nd Quarter of 2008 which covers the remittance months of April - June 2008. Based on the old schedule, the deadline of submission of Remittance Reports (RF-1) will still be on the 15th of July, 2008.

The new schedule which will effect for the month covering July 2008 requires the submission of remittance reports (RF-1) on August 15th, 2008. From then on, succeeding months' premium contributions remittance report will be due every 15th day after the applicable month. Employers who are "diskette-reporting" shall also follow the same schedule. However, the deadline of payment of remittance remains on every 10th day after the applicable month.

INCREASED TAX EXEMPTIONS FOR INDIVIDUAL TAXPAYERS

Both houses for Philippine Congress are now about to hold it's joint committee deliberations to put into law an increased personal and allowable deductions for individual taxpayers. Currently, a single taxpayer enjoys Php.20,000.00 deduction as a allowable deduction from his/her taxable income, for a head of the family individual is Php.25,000 and for a married individual Php.32,000. An additional Php.8,000 allowable deduction from a head of the family or married individual for every dependent to a maximum of 4 dependents.

The Philippines' House of Representatives and House of Senate are proposing an increased personal exemption to Php.50,000 for a single, head of the family or married individual and an additional Php.25,000 per dependent for the two latter types of individual taxpayer. This will be the government's answer to help ease the effect of rises prices and escalating cost of living. I believe it is just appropos that this bills be passed into law as this will very much directly benefit individual taxpayers. Hopefully, the Filipino people will already be hearing this good news in effect by the end of this end of June.

WAGE INCREASE IN CEBU CITY

I am a waged corporate warrior but a talk of a WAGE INCREASE gives me mixed emotions. Already, Metro Manila and in the CALABARZON region have been given Php.20.00 WAGE INCREASE and Region 10 have been granted a Php.12.00 increase on COLA (Cost of Living Allowance).

Let me explain my concerns when an impending wage increase is in the horizon. I see the move as an ignition to all other increases in goods and services. It also further pushes some companies to hire contract workers where tenure of an employee is forever contract-based and not be able to fully avail of the benefits of a regular employees. It further extends the gap of assuring job stability.

But then again, this is a problem of on a chicken-and-egg scenario. Whoever raises the bar higher will have to assume that the other will simply just have to catch up. My wish for the Philippines is that we harness the benefits of natural gas.

Making Financial Reports Turn to Gold

You cannot literally make a financial report turn to gold but you can make it be a tool for your company's gold rush. After the busy season for those in the Accounting Profession, May is then the time to hand-in those reports to external users.

There are two major regulatory agencies which requires the submission of Financial Statements. The first would be the Bureau of Internal Revenue who requires the Financial Statements to be submitted on or before the 15th of April, annually. The second major regulatory agency which needs the Financial Statements is the Securities and Exchange Commission (SEC). Audited Financial Statements are required or used twice in the summer months by the SEC. The first would be on or before the 30th of April (after the Financial Statements have been stamped received by the BIR) and the second is on or before the 30th of May 2008. The second submission requires a format known as General Form for Financial Statements (GFFS). The GFFS is a specifically formated template by the SEC which contains the data from the Annual Audited Financial Statements (AAFS). This is to a requirement for corporations with a gross revenue of at least Five Million Pesos (PHP.5,000,000.00). These Financial Statements are indeed worth in gold judging by their relevance.

Financial statements are relevant not only to the users in the organization but equally more important to entities outside the corporation. These are the regulatory agencies and creditors especially banks who see these financial statements in gold.

Philippine TAX AMNESTY Deadline Today

The deadline for the Philippines' Bureau of Internal Revenue's Tax Amnesty Program, otherwise known as R.A. 9480 or the Tax Amnesty Act of 2007, is today - May 5, 2008.

The original deadline set by the Bureau was on March 6, 2008 but was later amended by the Department of Finance through Revenue Memorandum Circular 29-2008. The amnesty program covers internal revenue income taxes of taxable year 2005 and prior years. Take note though that this only covers Income Taxes and does not include liabilities for withholding taxes for expanded and compensation withholding taxes. The amnesty fees ranges from Php50,000 to Php500,000 for corporations, depending on the company's authorized capital stock, while Php50,000 for individuals.

What this TAX AMNESTY does is that it erases Income Tax Liabilities of 2005 and prior years and will in effect, generally exempts the taxpayer on BIR Audits for the said years. For the detailed information, regulations pertaining to this Law can be found on the Bureau of Internal Revenue Website (www.bir.gov.ph) on how to avail of the Philippine TAX AMNESTY Program.

I Follow Comments on Cebu iMaginations

I have enabled a "Do Follow Comment" on my Cebu iMaginations site. This would be my way of thanking my visitors who dropped a comment on any entry on my posts by linking them back through a "Do Follow Comment" Plug-in.

Cubicled Playground is back on Business

Okay, okay. I thought I wouldn't be going back to blogging on my Cubicled Playground but had open this again. For reasons my dear friends will soon discover and I may not need to say it.

So there we go, Cubicled Playground is back online with a new look, hopefully a new feel and a logo to add on.



So welcome back again, friends to my Cubicled Playground!

Transferred to Cebu iMaginations

Money in the Net

It's amazing how the word "money" is being searched in the internet. That probably is why a lot of blogs talk about money-making.

My entries in keywording Show Me the Money in Cebu is steadily making it's way on the top rankings and Making Cows Turn to Cash is on top of the SEO too. This just shows that not only are we looking for money and opportunities of money the traditional way but also on the internet. Indeed, there are a lot of opportunities that can be found on the net and not just in Cebu, it simply takes a lot of patience, perseverance and little luck for the internet to show you the money.

Debts, Death and Taxes

Today’s issue of the Philippine Daily Inquirer published a column with the heading “Delay in corporate income tax cut looms; Congressmen want relief for individuals instead”. This news, as for me in the corporate taxation field, could only shake my head in disappointment. With all the mounting rise in costs of business, the reprieve that a lowered corporate tax would have meant the much needed help for thriving businesses especially those in the export industry. A break on the 35% income tax on corporations would have meant lowered prices for products and services or such savings could have been shifted to employee salary increase.

On a personal note though, this news brings joy to salary earners as there is a pending proposal in Congress that additional personal deduction be raised from Php.32,000, for married individuals, to Php.75,000 each. In a lot of ways, this would help families. This will therefore lower the taxable income of married individuals which directly will increase net take home pay as this would then require lower monthly withholding taxes. This is great help especially those whose salaries would even be not enough to provide the basic needs of the family. Among which would mean bigger budget for food on the table, a more stable budget for savings, or a wider source for funding to pay up Homeowner Loans. Hopefully this would see the light of a addendum to the present tax laws. The citizens have long been waiting for this news and it would be about time.

Moving from the World to Cebu

I have all been a Cebuano all my life. All things being equal, there would be nothing like the Queen City of the South, I know the place like the palm of my hands. But I have never been a Cebu-based Cebuano all the time. I have spent around 5 years in Lilo-an, Southern Leyte but still with the summer vacations spent in Cebu.

I was born in Cebu City. All the way from conception up to the pre-natal months, I lived outside of Cebu City. But as my mother's compulsion, being a 100% Cebuana herself and to deliver her first born son in a place she had known all her life, went back to Cebu City. Thinking about it, it was like my mom being in a basketball finals game 7 and she just wanted to play in her hometown. And it was hometown indeed. Her gynecologist was her close friend, who by the way was the reason for my unique second first name, and is my godmother. There was no place she could think of where she can be comfortable with the delivery but only in Cebu City Map. It was only then that I was two months old that we went back to Leyte and after 5 five years finally decided to head back home, to Cebu City home.

Moving from one place to another takes a lot of one's time, energy and resources. There comes the decision of looking for a permanent mls real estate or homes for rent. Buying the permanent relocation real estate property will be a lifelong decision and thus be decided with so much care. On the other hand, renting a place while could be an option which also has to be done with a lot of consideration.

I have never been back to Leyte since we left for good. I could even recall wonderful and joyful experiences there. Perhaps one of these days, I shall find a way to visit the place. Leyte has been a part of me and a help that I realize the value of being at home. Being with people you share your joys, sorrow and dreams with. Dreams for a better Cebu City for my family.

Updates from Cebu City Map

Even amidst calls for a president’s resignation, Cebu City Map has stood firm on its thrust to be always mean business for its inhabitants. The weekend, more specifically Friday, Cebuanos saw one of the more attended public gathering relating to the Philippine’s current events. It did caused quite a headache for motorists like yours truly but all taken into consideration, it was business as usual in the Cebu City Map.

A wonderful news for the Cebu City is the recognition as being one of the awardees of the Gawad Galing Pook 2007 along with nine other cities in the country. Cebu City’s “strengthening the justice system in the grassroots” was picked among the 19 finalists evaluated last November. Ten were chosen as recipients of the award, which recognizes local government units (LGUs) “for outstanding and trailblazing local governance programs” and thus Cebu City was included. Further details of which can be found here.

It is always refreshing to hear such positive news amongst chaotic and sensational happening in the country’s capital. Still, much is being talked about with regards to the NBN-ZTE deal and it is always a welcome to the senses, especially if these are close to your heart such as your hometown. It is always is great to note that even beyond the confusion, it is still business as usual in Cebu City Map.

Getting Ahead of the Race

When I was young, one of the favorite activities during sundays was groceries shopping with my mother. It was not because I would be able to choose more junk foods than my younger siblings who were more often left at home as junk foods would be for the family not only intended for one. It was the goodies being offered for free by either promo girls or mascots.

Being in the field of Business and Finance, I realize how important it is for product visibility. Especially for a product which is a new entrant to a market, it has to penetrate the customers with aggressiveness so as to be known at the fastest time possible. One of the ways to do this activity is through promotional items. Products may be introduced to the market together with an item that pushes a consumer more to buy it. A new toothpaste brand may be packed with a toothbrush so as to entice the consumer to try the product. Another strategy may be done through a product or brand launching where the new item may be packed as giveaways or promotional gifts to suppliers, company patrons and valued consumers to make them aware and try the product.

Promotional products sprout very so often so it is a must that these product launch activities be handled by professionals. It is very important that products project the company's vision and culture and at the same time deliver the effectiveness and efficiency expected by consumers. But beyond promotional items products should address the need of a consumer on a more innovative way, for a newly launched product to succeed and this may be done with the help of public relations experts.

Page Ranking to a Cebuano Blogger

I have not heard nor have given attention to blogging until only mid-2007. A lot of things were cooking up then that I simply did not have time to look at other beautiful and exciting things free stuffs can offer. I started my Cebuano Blogging roughly 7 months ago and it was all a trial and error approach. I did not know what to blog about, as I only knew that it was tweaking some html codes in the process. This I have mentioned in my previous posts.

But with that short span of time that I got to have a peek of the blogging world, one by-word could easily be identified and that was Page Ranking. Well, what is that anyways? I did not know then and I don't know more now. For all I care is that this so-called page ranking somehow gives a site higher authority than others. Higher authority means that the Google search engine have archived enough pages from your website that when a phrase related to your site is searched, your URL address is given higher preference or authority. But I can be wrong, I am not an expert on this. I just interpret it by the way I have experienced SEO experimentation so far.

The benefit that I got from this Page Ranking thing was the opportunity to earn paid postings were widened. I got to qualify to post on higher paying opportunities than before. But I know as like in anything, this has to be done in a lot of moderation so as not to lose that long-awaited page ranking.

Work Safety

In whatever career a person chooses to invest his or her time on to, it is not only enough that such person has the right skills and exposure needed for the task at hand. Equally important is the person’s dedication to the chosen profession or vocation. These two ingredients, right skills and dedication, are need for a person to be successful at work.

And because of this dedication that at times a worker goes beyond the call of duty and in the process risks life and limbs in the performance of the job. It is always thus a requirement that considering these risks, a worker observes safety measures to protect himself. Unfortunately, situations happen beyond anyone’s control and in an unexpected moment. Accidents are such that they at times occur even beyond safety precautions. It is on these situations that a worker needs Accident Compensation. And it is in these times and situations that a worker needs assistance so as to be provided with the proper care.

It is equally important that accident compensation assistance is provided by those which have integrity, independence and disposes the task at the interest of the worker. These claims can be done at the most professional way and thus is very relevant that a worker chooses the most knowledgeable professional services firm in handling accident compensation.

Updating Cebu City Dates

This calls for great for a celebration. I just noticed that this humble cebuano blogger got PR 3. Pinch me if I'm dreaming, otherwise Yippee!

Will this beautiful development mean better income opportunities? I don't know but sure do hope so. For more than a week of cubicled playground absence, simply meant that got a new to experiment, twist and tweak. My previous posts mentioned about a funny yet exciting attempt to launch a cebuano website. During the days of Cebuano Blogging absence meant days spent on mygoldendagger.com. I have named it Cebu Imaginations.

I do hope you could drop by sometime on the site and give me your ideas or opinion about it. Be expecting you guys there on my Cebu Imaginations.