by The Happy WAHM
The TRAIN Act, or the Tax Reform for Acceleration and Inclusion Act, is now in effect.
I’ve gone ahead and had my COR updated again at my RDO so that it will correctly display the new payment schedules and the tax table I’ll be under. Alas, I cannot avail of the straight 8% tax due to my status as a BMBE, but it can be changed by next taxation year.
I’m still wrapping my head around the new system, and the agency has yet to update the online filing platform. The existing package does not include the ATC for non-vat businesses yet, so it’s a good thing that we are not expected to file until May.
For now, I’m leaving this here, for easy reference. This is the easiest and the most simplified sample computation of taxes under the two options. This was personally given to me by the Revenue Officer in my municipality, and I don’t think this is in the BIR website.
You can download a copy here.
If you want to read more about the implementing guidelines of the TRAIN Act, go here.
Truth, I read all the 27 pages of that guideline, and I didn’t really get it. Examples of tax computations comparing the graduated income tax versus the 8% flat income tax rate were presented using different taxable income amounts. More like comparing apples to oranges, if I may say so.
So I’m really grateful to our Revenue Officer for giving me this simplified copy.
But of course, I would still recommend that you read RR No. 8-2018 to better familiarize yourself with the inclusions and schedules.
I will update this post as soon as the eBIRForm has been updated, so I can share more information with you.
Do you, have questions, comments or feedback about this post?
Please leave a comment below, or post them on my Facebook Page.
by The Happy WAHM
Better late than later! Finally, my much-delayed post about my BMBE certification.
I received my BMBE Certificate of Authority for my two registered small businesses back in October. But due to my full schedule, I didn’t get to have my BIR (Bureau of Internal Revenue) status updated until December. That, and because I’m really not fond of going to government offices.
So what is BMBE?
It stands for Barangay Micro Business Enterprise. According to Section 3(b) of RA No. 9178, otherwise known as the Barangay Micro Business Enterprise Act of 2002, a BMBE is “Any business entity or enterprise engaged in the production, processing or manufacturing of products or commodities, including agro-processing, trading and services, whose total assets including those arising from loans but exclusive of the land on which the particular business entity’s office, plant and equipment are situated, shall be not more than three million pesos.”
This Act aims to encourage formalization of informal or underground businesses by giving incentives and benefits to certified BMBEs.
Based on a 2014 data from Philippine Statistics Authority, 99.5% of all businesses in the Philippines are MSMEs or Micro, Small and Medium Enterprises. And from that 99.5%, 89.4% are Micro.
The same data shows that MSMEs provide employment to 65% of the labor force. They are clearly the primary source of livelihood and jobs in the country. Hence, the government’s drive to encourage micro businesses to register and become legal tax paying entities.
Back when I first heard of BMBE, the registration was under the local government units, and businesses were required to pay registration fee. While the amount was minimal (I believe it was set to not exceed Php 1,000.00), it was enough to make really small businesses less enthusiastic about registering. Including myself.
In recent years, the responsibility to issue Certificate of Authority was transferred from the Municipal Treasurer to the Department of Trade and Industry (DTI) through its Negosyo Center. They removed the required registration fee, and the process can be completed in three (3) easy steps:
- Step 1 : Accomplish BMBE Form and submit to the Negosyo Center / DTI Office where business is located with any of the following:
- Certificate of Business Name Registration from the DTI (for sole proprietors)
- Certificate of Registration from the SEC (for corporations)
- Certificate of Registration from the CDA (for cooperative)
- Step 2 : DTI will evaluate the eligibility of the application
- Step 3 : If qualified, within 15 working days, DTI issues Certificate of Authority valid for 2 years
I was fortunate enough to be among those invited by our local Negosyo Center to attend a BMBE orientation.
Who are qualified to register?
- Single Proprietorship, Partnership, Corporation, Cooperative or Association
- Total assets not more than P 3,000,000.00
- Enterprise engaged in:
- Production / Processing / Manufacturing
- Trading
- Services – except government licensed services
Who are not qualified?
- Medical/Dental/Veterinary Clinic
- Notary Public/Law Firm
- Real Estate
- Construction Firm
- Accounting Firm
In short, if you are small business practicing a profession, then you cannot register as BMBE.
Since my services as a virtual assistant are not government-licensed services, I qualified. And my small craft business is engaged in manufacture and retail.
What are the benefits of becoming BMBE-certified?
Tax Exemption
Accredited businesses are exempted from paying income taxes arising from their operating expenses. This, however, does not include the exemption in transaction taxes such as value-added tax (VAT) and other percentage taxes, among others. Furthermore, BMBE-accredited enterprises are still required to regularly file their regular income tax returns.
Minimum Wage Exemption
BMBE-registered enterprises are also allowed to pay below the statutory minimum wage which is otherwise not permitted by law. However, they are still required to pay for their employees’ benefits such as PhilHeath, SSS, and HMDF.
Credit Priority
Financial institutions are given incentives in providing loans to BMBE-registered business enterprises. They are also required to provide a special credit window for BMBEs.
Growth assistance
To provide technical support, the government has allotted funds to agencies supporting BMBEs such as DTI Negosyo Centers, UP Institute for Small Scale Industries (UP-ISSI), and the Department of Science and Technology (DOST).
So for the next two years, I will be exempted from paying the quarterly and annual tax. I will only have to pay the monthly percentage tax, which is 3% of gross income. After two years, I will need to renew my certification, and if I’m still qualified, like if I don’t build a warehouse and acquire equipment worth 3.5 million pesos in the next two years, I will have to get my COR with BIR updated again.
For WAHMs, freelancers, independent contractors, or crafters who are on a fence whether to register their small businesses or not, please read my post on Paying Taxes. Once you are registered, go ahead and visit your local Negosyo Center. It’s so easy to get certified now.
Here’s what a Certificate of Authority looks like.
Do you have questions, comments or feedback about this post?
Please leave a comment below, or post them at my Facebook Page.
by The Happy WAHM
For the first time since I became a WAHM, I had a day off!
I mean, an official one. An I-don’t-have-to-bring-a-laptop-with-me kind of day. An it’s-okay-to-not-have-internet-connection-where-I’m-going kind of day. An I-don’t-have-to-check-my-email kind of day.
It was awesome!
So I went to the city to meet up with my friend, Celia, who’s the creative head and the powerhouse behind Brownroots Creatives and is now busy managing her co-working space, Brownroots Coworking.
Uhmmm… I actually checked my work email before leaving the house. Responded to some messages both from my email and Slack, and had my mobile data and powerbank with me just in case I need to respond to some urgent messages. How awesome is it that I can actually work using my phone, right?
But I’m digressing.
I’m supposed to be talking about Brownroots and why I had to see Celia.
Who is Celia and what is Brownroots?
I met Celia at one of my workshops. It was the second and final run of my VA Success Blueprint workshop.
What? Two runs only? But why?
I’ve turned the workshop module to a one-on-one coaching module, that’s why. I get to see results better on one-on-one coaching than in classroom workshops, and I really have this need to see my coachees succeed in transitioning from corporate to WAHMing.
Digressing again, sorry.
So my event coordinator got Brownroots Creatives to sponsor the bags that we gave away to the participants. On top of the bags, she also raffled off some really cool t-shirts. I loved the bags! They were of canvas material and had my logo printed on them. And the shirts were actually their flagship product for Brownroots Creatives’ business-in-a-box. Their tagline? “Let your shirt do the talking.”
I had a couple shirt made for me and my husband.
Mine says: My husband has an awesome wife.
His says: My wife has an awesome husband.
I wear mine when I go out.
Husband wears his to sleep.
So much for having a couple shirt!
Digressing… again!
As a major sponsor, we gave her two free seats to the workshop. She brought her son who does graphic design, plays the guitar, sings and sounds awesome, and writes his own songs when he’s not doing covers.
And so we met. And we hit it off, right from the get-go.
Celia is a former OFW (Overseas Filipino Worker). She had a really bad experience abroad. Like going to prison kind of bad. She was innocent, of course. And when finally her case was resolved, she came back home to the Philippines and vowed to start another chapter in her life, stronger and better. I met her at the time that she was just starting out with the business. Her work abroad was in advertising, and she’s a graphic designer. It made sense for her to start a business in the creative niche.
Why Brownroots?
She says it’s her statement of being Pinoy. She’s proud of her brown-skinned race. As we should all be.
I like her branding. It delivers a message. It’s easy to recall. It draws empathy.
She learned of my story through this blog, before we personally met. How I succeeded in starting a career from home. My story resonated with her, and we both have this strong desire to build a community of empowered women. And while I focus on inspiring women to go after their dreams and be financially independent through this blog and social media, Celia untiringly goes to events and connects with people in person. And when I say connect, I mean she really connects. The we-can-be-friends-forever kind of connect.
After taking a break from doing classroom workshops on virtual assistance, I created a new module called Hobbies to Business, teaching people how to earn from doing something that they love. I did two classroom workshops for this module and then turned it into an online course, as well. Celia stuck with me, supporting me all the way. I super love this woman! And from what I gather, the feeling is definitely mutual.
Sometime last year, we talked about having my girls’ artworks printed on t-shirts and mugs and selling them. I’m teaching my kids entrepreneurship, which is also what Celia is doing with hers. The plan was that I would send her the graphics and Brownroots Creatives would print them and ship them.
But my husband and I have also been looking for an income stream that will not be dependent on both our skills as virtual assistants. What if he or I get sick? What happens if I can no longer be a VA, or he no longer loves what he’s doing?
We need a fallback, and we need to establish something while there is no need for it yet. We need something that we can hire other people to do when we can no longer do it personally. And we need something that our children will also enjoy doing.
So we agreed on making a go for the printing business. Our daughters will be our in-house designers, and our son will operate the press.
Celia was very supportive when I told her about it. Aside from her printing business, she also provides starter packages to those who want to get into the printing business. So she sent me the list of her packages and left me to think about how I want to get started. But my VA work did not give me much time to pursue getting the business off the ground.
So on my first official day off, I went to meet with Celia as my first step in making our plan become a reality. We’re ready to invest in the complete package, the whole nine yards, and Brownroots Creatives is my supplier of choice. I spent the afternoon with her teaching me how to navigate the design software and how to operate the press. It was fun! I can imagine the kids having a blast with that weeding thing on the vinyl.
And to top it off, Celia also had two of her friends at the coworking space while I was there, and they are very interested in learning how to become VAs, so we ended up planning a small, intimate workshop for a group of no more than ten people, soon.
I also love her coworking space, by the way.
Here’s a couple of my takeaways…
I am so looking forward to adding this new piece in my WAHMing life, and I’m hoping that I’ll have your support, too!
Oh, and by the way, today is my second day off. So I found time to write this post. Yesterday was supposed to be the day that we’re going to put up our Christmas tree. But I had to prioritize seeing Celia.
I had an early start this morning. While the kids were preparing to leave for taekwondo training, I changed the curtains. Ironed them, too! Like I don’t really mind the fold creases on curtains, but I was feeling pretty domestic so I went ahead and ironed out the fold creases before putting them up. Then I took down our 16-year old tree from storage and set it up. It’s still bare at this time. I left the decorating to the kids.
Okay, my time’s up! Come and visit again!
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Please leave a reply below, or post them on my Facebook Page.
