Sample Headaches with Outdated Bookkeepers

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For entrepreneurs, time is of the essence and while they may agree that they can do the accounting and bookkeeping by themselves after an education on basic business accounting and BIR compliance, paying for a bookkeeper or accountant is sometimes more practical. First, entrepreneur can concentrate more on operational aspect of the business. Second, the books of accounts and related compliance with applicable government rules and regulations could be more efficiently handled because the bookkeeper or the accountant is more knowledgeable on them. It is so saddening to say that based on the experiences of some small & medium entrepreneurs, not all bookkeepers and accountants are competent enough to properly handle the bookkeeping and proper compliance in keeping with the existing rules and regulations of the government agencies.  This is without prejudice to the accounting profession because this may not apply to all, but it appears that some have their

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Tax savings under Optional Standard Deduction (OSD)

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For taxpayers engaged in trade, business, or practice of profession, optional standard deduction (OSD) is a good are to look at for tax savings.  Under Section 34(L) of the Tax Code, as amended by Republic Act No. 9504 dated June 17, 2008, and hereunder quoted: “Section 34(L) Optional Standard Deduction. – In lieu of the deductions allowed under the preceding Subsections, an individual subject to tax under Section 24, other than nonresident alien, may elect a standard deduction in an amount not exceeding forty percent (40%) of his gross sales or gross receipts, as the case maybe. In the case of a corporation subject to tax under Sections 27(A) and 28(A)(1), it may elect a standard deduction in an amount not exceeding forty percent (40%) of its gross income as defined in Section 32 of this Code. Unless the taxpayer signifies in his return his intention to elect the optional

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Tax-exempt COLA increased by P30

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Good news for NCR workers! Under the Department of Labor & Employment (DOLE)- NCR’s Wage Order No. 17, minimum wage is increase by P30 cost of living allowance (COLA) as follows: First tranche – P20 per day upon the effectivity of Wage Order No. 17; and Second tranche – P10 per day effective on November 1, 2012. The new minimum wage rate under the Wage order No. 16 that took effect last 26 May 2011 of P426 for National Capital Region integrating the previous COLA of P22 will remain in force. Integrating the new COLA under the new Wage Order, the new minimum wage for non-agriculture sectors will now become P446.00 (P426+20) upon effectivity of the new Wage Order No. 17, and P456.00 (P446+P10) on November 1, 2012 or equivalent to P13,680.00 a month (P456.00 x 30 days). In effect, the minimum wage earners will now earn P600 more (P20

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Views on Real Estate Mortgage for Microlending

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A friend in the micro-lending industry once asked – “Is Real Estate Mortgage worth to look into for microlending?“ Let me share with you our view on the circumstances and benefits of Real Estate Mortgage (REM). REM is an accessory contract in the form of a collateral security for the  availment of the credit facility. As compared to a no collateral loan, REM may prove to be better as the lender would have some property to pursue upon default as compared to an empty hope in a non collateral situation. To be effective, a REM has to be in a legal document to be executed by the parties. Based on such document, it shall be annotated in the title of the real property (TCT or CCT) with the Registry of Deeds. The purpose of this is for the binding effect of the REM to third parties. Upon default, foreclosure proceedings

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Tax-exempt uniform allowance increased

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The Bureau of Internal Revenue (BIR) has issued Revenue Regulations No. 8-2012 – “Further amends Revenue Regulations 2-98 and 3-98, as last amended by Revenue Regulations 5-2008 and 5-2011, with Respect to de minimis benefits” or “RR No. 8-12“. Under RR 8-12, uniform allowance of P4,000 a year had been increased to P5,000 a year effective January 1, 2012. Being a deminis benefits, or provisions to employees of relatively small value for their general welfare, the same is exempted from withholding tax on compensation. To qualify for tax-exemptions, it is not required that the employer-taxpayer prescribes a particular company-wide uniform. What is required is that the employer-taxpayer actually provides such uniform allowance as a matter of policy. It could be given one-time of P5,000.00 anytime during the taxable year or at a uniform monthly rate  of P416.67 (P5,000 divided by 12 months). In effecting such de minimis benefits in BIR

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BMBE Law eyed for amendments

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The Barangay Micro Business Enterprise (BMBE) Law or Republic Act No. 9178 was enacted sometime in 2002 to encourage the growth and formation of barangay based micro-enterprises. This has long been effective, but based on our observations, only few enterprises registered and availed of the same. Under the Department Order No. 17-04 of the Department of Finance (DOF) providing guidelines, hereunder are the basic qualifications of the BMBE to qualify for income tax exemptions, exemption for minimum wage application, and other benefits: a. Barangay based which means (a) majority of its employees are residents of the municipality of principal office location, (b) principal activity consist in the application of a skill peculiar to the locality, or business operations confined to the LGU of principal office location. b. Micro-enterprise in nature and scope which requires that (a) its principal activity be primarily for livelihood, or determined by SMED or DTI as

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PHILSME EXPO 2012 – May 11-13, 2012

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Tax and Accounting Center, Inc. (TACI) in coordination with GPP & Co, CPAs (GPPCOCPAs)participated in the duly concluded PHILSME Expo 2012 organized by Tradecon along with its various exhibitors. The 3-day event from May 11-13, 2012 at PICC Forum, CCP Complex, Pasay City had been said to gather some 8,000 participants and visitors from around the Metro Manila.During the event, various exhibitors had participated ranging from franchising business, direct selling, networking, retailing, and financial services. TACI Resource Speaker, Mr. Garry S. Pagaspas, CPA, LLB was called up to share insights about BIR Compliance for SMEs on the first day of the event, while the Managing Partner of GPP & Co., CPAs, Mr. Floyd Paguio, CPA, is scheduled to share insights about SEC Compliance for SMEs on the third day. With the advent of strict implementation of the government authorities, our guest speakers shared their insights about the basic requirements of

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1987 Ph Constitution: Suffrage

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1987 Constitution of the Republic of the Philippines Article V – Suffrage   Section 1. Suffrage may be exercised by all citizens of the Philippines not otherwise disqualified by law, who are at least eighteen years of age, and who shall have resided in the Philippines for at least one year, and in the place wherein they propose to vote, for at least six months immediately preceding the election. No literacy, property, or other substantive requirement shall be imposed on exercise of suffrage. Section 2. The Congress shall provide a system for securing the secrecy and sanctity of the ballot as well as a system for absentee voting by qualified Filipinos abroad. The Congress shall also design a procedure for the disabled and illiterates to vote without the assistance of other persons. Until then, they shall be allowed to vote under existing laws and such rules as the Commission on Elections may

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1987 Ph Constitution: Citizenship

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1987 Constitution of the Republic of the Philippines Article IV – Citizenship   Section 1.  The following are citizens of the Philippines: Those who are citizens of the Philippines at the time of the adoption of this Constitution; Those whose fathers or mothers are citizens of the Philippines; Those born before January 17, 1973, of Filipino mothers, who elect Philippine citizenship upon reaching the age of majority; and, Those who are naturalized in accordance with law. Section 2.  Natural-born citizens are those who are citizens of the Philippines from birth without having to perform any act to acquire or perfect their Philippine citizenship. Those who elect Philippine citizenship in accordance with Section (3), Section 1 hereof shall be deemed natural-born citizens. Section 3. Philippine citizenship may be lost or reacquired in the manner provided by law. Section 4. Citizens of the Philippines who marry aliens shall retain their citizenship, unless by their

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1987 Ph Constitution: Bill of Rights

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1987 Constitution of the Republic of the Philippines Article III – Bill of Rights   Section 1. No person shall be deprived of life, liberty, or property without due process of law, nor shall any person be denied equal protection of laws. Section 2. The right of the people to be secure in their persons, houses, papers, and effects against unreasonable searches and seizures of whatever nature and for any purpose shall be inviolable, and no search warrant or warrant of arrest shall issue except upon probable cause to be determined personally by the judge after examination under oath or affirmation of the complainant and the witnesses he may produce, and particularly describing the place to be searched and the persons or things to be seized. Section 3. (1) The privacy of communication and correspondence shall be inviolable except upon lawful order of the court, or when public safety or order requires otherwise,

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