SMEs get tax breaks under Train
Latest value-added tax (VAT) collections indicate that small and medium enterprises (SMEs) received tax breaks amounting to billions of pesos under a recently-implemented reform law, the Finance department claimed on Wednesday.
In a statement, the agency said the Bureau of Internal Revenue (BIR) had reported a drop in the VAT take but higher percentage and income tax collections.
Finance Secretary Carlos Dominguez 3rd was quoted as saying that this meant many SMEs had benefited from the VAT threshold having been raised to P3 million from P1.9 million under the Tax Reform for Acceleration and Inclusion (Train) Act.
The increases in the percentage and income tax collections, meanwhile, indicate that SMEs and self-employed individuals that have not exceeded the VAT threshold were now opting to pay either the 8 percent income tax on gross sales or receipts and other non-operating income or the percentage tax and graduated income tax rates under Train.
From January to June this year, VAT collections amounted to P63.217 billion at the BIR’s regional offices, lower than last year’s P72.813 billion.
Percentage tax collections rose to P18.079 billion from P12.130 billion in 2017, exceeding the tax bureau’s goal of P14.803 billion.
Income tax collections from the regions, meanwhile, rose to P207.332 billion from P206.454 billion and also surpassed the goal of P198.618 billion for the period.
For the entire country, income tax collections rose to P500.585 billion, higher than the goal of P450.375 billion and the 2017 collection of P489.456 billion, the agency reported.
VAT collections for January to June totalled P179.951 billion, short of the BIR goal of P222.419 billion but slightly higher than 2017’s 178.435 billion.
Lastly, the first half percentage tax take rose to P44.158 billion, topping the P43.744-billion target and the year-earlier result of P38.241 billion.
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