All about taxes

I was wondering the difference of taxation in the Philippines from other countries. When I was working student as a Local Store marketing at Mc Donalds, I remember that I have helped a customer who is a foreigner. He was looking at the receipt and told that in Hongkong there is no tax. Now by searching online, I have learned that it is untrue. Although there is no sales tax, no capital gains tax, no VAT there is a maximum salary tax of 20% and profit tax maximum of 16%.

Here in the Philippines, we are required for Donor’s Tax, Estate Tax, Income Tax, Percentage Tax, Value-Added Tax, Withholding Tax, Excise Tax and capital gains tax. There is a filing deadline to meet like for the income tax return, the deadline is on or before the 15th day of April of each year covering taxable income for the preceding taxable year. In the US, they also have tax deadlines and they have the federal tax extension form. Through this forms, the preparation and filing of your taxes are easy making it turbo tax. Good thing that I am an independent work-at-home mom that I don’t have to force myself in filing a tax return here in the Philippines. I believe that my husband’s income tax is enough for the Philippine government to take juice from our family income since I am independently working at my own risk. I really feel sad every time I buy my grocery list then look on the receipt, the price increases immediately almost monthly as well as the VAT.

My husband and I are frugal. We are trying to compute for our monthly income. We are also trying to figure out the tax rate for his salary income and this table that I get from bir.gov.ph helped  a lot.

Tax Rate for Individuals Earning Purely Compensation Income and Individuals Engaged in Business and Practice of Profession

Amount of Net Taxable Income Rate
Over But Not Over
P10,000 5%
P10,000 P30,000 P500 + 10% of the Excess over P10,000
P30,000 P70,000 P2,500 + 15% of the Excess over P30,000
P70,000 P140,000 P8,500 + 20% of the Excess over P70,000
P140,000 P250,000 P22,500 + 25% of the Excess over P140,000
P250,000 P500,000 P50,000 + 30% of the Excess over P250,000
P500,000 P125,000 + 32% of the Excess over P500,000 in 2000 and onward

For more details on Philippine tax information kindly visit http://www.bir.gov.ph.

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