Philippines Eases Microbusiness Taxes

February 1, 2017 Taxation in Philippines

fish vendors from a local wet marketMANILA – Microbusinesses in the UK may soon enjoy a reduced tax rate and greatly eased filling requirements.

On January 31st at a hearing of the Senate Ways and Means Committee of the Philippines, the Finance Undersecretary Karl Kendrick Chua announced that the national Department of Finance is proposing new tax rules which would see microenterprises taxed at a rate of only 8 percent.

Under current regulations businesses of all sizes face a corporate income tax of 30 percent.

The greatly reduced tax rate of 8 percent would be calculated on a business’s gross sales, if the level of sales is PHP 3 million or less per year.

Alongside the reduced rate, businesses taking advantage of the new rules would also only need to file tax returns once a year, instead of quarterly.

It is believed that the reduced tax rate and the government’s ongoing efforts to ease compliance practices will greatly increase compliance rates while also decreasing the annual administrative burdens of the country’s numerous small businesses.

It is estimated that more than 89 percent of businesses in the Philippines are microenterprises which would qualify for the beneficial new rules.