TAX ON SARISARI STORES

to increase collections and reach the target collection for this year 1.46T.
The BIR reminded the MIEs that they are already enjoying a number of privileges
under the law but they still owe the government some portion of their income. T
hus, it said, they are all encouraged to comply with tax-related requirements.
They are, however, not required to pay the P500 registration fee but still have
to register with the BIR.
The BIR said this move aims to target the activities of tax evaders who try to h
ide behind small store fronts but are actually earning big.
The memorandum is also expected to increase collections and boost the state s coff
ers to finance more government projects.
The MIEs are those considered to have incomes that are just within subsistence o
r those who are not earning more than P100,000 in any given 12-month period. Th
ey are self-employed individuals, according to the Revenue Memorandum Circular N
o. 7-2014 of the BIR.
Under this memorandum, these MIEs must pay a certain tax from a portion of their
income but they are not liable to pay business taxes and value-added tax.
Unlike self-employed professionals, they are not required to pay a withholding t
ax. In short, the taxes they supposedly owe the government are not subjected to
additional charges. That is the privilege they get for having a small income.
Revenue Memorandum Circular No. 7-2014 comes with complementary Circular No. 8-2
014, which states that individuals who wish to file for certain exemptions from
their income taxes must obtain a certification from the BIR regarding these spec
ific exemptions.
If they fail to do that, then they will not enjoy any exemption from their taxes
and must pay the total amount due for the state. Moreover, the complementary c
ircular maintains that the certification must explicitly state what the exemptio
n is for.
According to the BIR, stores are supposed to withhold taxes for certain goods an
d purchases. In turn, these withheld taxes are remitted to government coffers v
ia the BIR. In fact, there are laws governing this practice.
If a store fails to comply with the provisions and rules stated in the Tax Code,
then, it is liable to pay a penalty aside from being required to pay the taxes
it is due to the BIR.