Small vendors find ally in Sen. Aquino

CEBU, Philippines - A bill that has been recently filed to exempt marginal income earners  from paying income tax is giving small vendors hope and an assurance that they have an ally in their business.

Several small businessmen said they are going to support Senator Bam Aquino’s Senate Bill 2227 which intends to grant income tax exemption to MIEs including fishermen, farmers, sari-sari store and carinderia owners and drivers/operators of tricycle. 

The proposed bill is the senator’s response to Revenue Memorandum Circular No. 7 – 2014 that the Bureau of Internal Revenue issued, forcing small entrepreneurs to pay income tax returns. 

A Philippine Star report quoted Senator Aquino as saying that obliging these small vendors to income tax is a new burden to the poor.

Sari-sari store vendors said it is not fair to let them pay income tax dues as they are earning money just enough to support their families and their daily  expenses.

“Gamay ra kaayo og ganansiya ang sari-sari store intawon unya nganong paninglan pa man mi og tax,” lamented 52-year-old Dolores Tocle, a vendor in Lapu-Lapu City.

She stressed the government should understand that they are only getting a little income saying a lot of vendors are highly dependent on such enterprise.

Tocle, a mother of 6, is earning not more than P500 everyday which, she said, is just sufficient to compensate expenses and buy supplies for her store.  “Kung pabayron mi, unsa na lang among magasto sa among pamilya.”

Marilou Martinez, another sari-sari vendor in Cebu City’s Oprra Village, said the BIR’s  mandate could prevent vendors especially those who are just starting to succeed in their enterprise.

“Maglisod na hinuon mi og survive ana kay naa na man laing bayranan,” said Martinez.

A BIR official explained that the circular aims to reiterate to MIEs on their duty to register and comply requirements with the bureau pursuant to Revenue Regulations No. 7 – 2012 (Amended consolidated revenue regulations on primary registration, updates and cancellation).

“Even if you are a marginal income earner you are required to do that simple thing,” said Manuel M. Mapoy, assistant regional director of BIR Cebu. “The BIR has required them to register with the minimal documentary requirements.”

The RMC No. 7 – 2014 has said that MEIs are required to file and pay the annual income tax return similar to any other self-employed individual. They are exempted though to pay the P500 Annual Registration Fee.

Mapoy said that even before the bureau has required them to pay, the circular has already said they need to register. 

Marginal income earners are people whose businesses do not reach a gross sales or receipts of P100, 000 or more every year.

If an individual reaches this amount as his annual income, he can no longer be considered as MEI, and thus he is bound for income tax payment.

The memorandum circular has also said MEIs are liable to pay the income tax but are exempted from paying the value-added tax and any percentage tax.

However, Mapoy told The FREEMAN, “You are required to file but it would be a different story if there would be a taxable income, that’s the time na magbabayad ka na ng income tax.”

He even cited section 3 of Internal Revenue Code that says all Filipino citizen—a resident or alien—doing business in the country are all required to pay taxes and that they are taxable on all income derived from sources.

Although Mapoy expressed sympathy to Senator Aquino for “filing the said bill exempting Filipinos who are trying to make a living,” he said he can not give any reaction for now.

“I think it is not yet right to react and it needs to pass first through the two houses,” he noted.

Despite Aquino’s bill now being filed, the BIR official said it would not hamper the bureau’s mandate to obey tax compliance.

In fact, he added that all their revenue district offices continue to do seminar to taxpayers on their obligations to the government and pursue the new stakeholders in the community. (FREEMAN)