Store owners hit BIR’s registration and receipt issuance policy

Apr. 25, 2014

TAGUM CITY — Small sari-sari store and carinderia owners here scored as “anti-poor” policy the new Bureau of Internal Revenue (BIR) memorandum requiring them to file income tax returns and to issue receipts to customers.

Roweda Virtudazo, 35, who owns a sari-sari store near a public terminal, sees it as another burden, saying that “earnings derived from store operations are very minimal. Taxing my small store will damage its operations economically and might lead to closure because I could not afford to pay the fees.”

“My store’s meager income obviously is insufficient to pay all the taxes, fees and penalities collected by the BIR and City’s Treasury Office. Now, I ask what will be left for us?,” Virtudazo said.

Ding Lumbayon, a carinderia owner, also branded it “repulsive and very desperate move” to collect taxes from small business owners.

“That’s why we are called marginal because we own a business but it has less profits. If BIR will impose tax on us, can they ensure that our operation will continue depsite the meager sales? The policy is pressing us down to the extent of business closure,” Lumbayon said.

Lumbayon, 62, also a retired public school teacher, added: “This desperation of BIR to increase its tax collection target is slowly killing us. I couldn’t see the logical wisdom behind the crackdown of milking MIEs to fill-in the national treasury. A move that is very anti-poor.”

On February 5 this year, the Bureau of Internal Revenue issued Regional Memorandum Circular No. 7 (RMC-07), ordering all marginal income earners or MIEs to pay income tax from a portion of their income but they do not have to pay business taxes and value-added tax.

The tax agency was trying to increase its collection to hit this year’s target of P1.46 trillion. Last year, it failed to get the P1.253 trillion target mostly because of tax evasion.

Included in the BIR’s campaign to curb tax evasion and plug tax leaks were farmers, sari-sari store ,carinderia owners, tricylce drivers and fisherfolks.

As defined in Section 3 of Revenue Regulations (RR) No. 7-2012, marginal income earners refer to “those individuals whose business do not realize grosss sales or receipts exceeding P100,000 in any 12-month period.”

The MIEs also have to register with the BIR even if they are not required to pay the P500 registration fee.

Noncompliance with the Tax Code rules would mean a penalty payment in addition to the tax payment requirements, stated in the BIR circular.

The revenue memorandum circular only refers to an individual not deriving compensation as an employee under an employer-employee relationship but who is self-employed and deriving gross sales or receipts not exceeding P100,000 in any 12-month period.

It further said, “the activities of such MIE should be principally for subsistence or livelihood.”

A certification from BIR is required for those who wish to file specific income tax exemptions and a certification must state the purpose of the exemption, it added.

Another store owner Ching Bautista, 64, said that such policy will result to an increase of prices of commodities and services.

“BIR is very harsh with this rule and to cope with the fees and taxes that BIR will impose to business owners, we will likely increase the selling price which I know will not be favorable to customers and consumers,” Bautista said.

Ordinary customers, on the other hand, favored the BIR’s policy, citing “equal treatment” on the implementaion of the law.

“They are doing business so why opposed to pay tax? We must remember that ordinary workers pay dutifully their tax even how meager our income also. Some small store owners are living a decadent and luxurious life. I believe the policy is fair to all,” Edgar Montalbon, a private school teacher, told DavaoToday.

College student Riza Mae Aquino said that BIR’s policy is “just fair” but emphasized that “it should pursue individuals and business establishments who failed to pay correctly their taxes to the government.”

“(A)lthough, it would seem fair but those “BIG” business tycons and establishments that were untruthful in their tax declaration must be on the priority list of BIR,” said Aquino. (

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