Mommy Ginger
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Understanding TRAIN or Tax Reform for Acceleration and Inclusion

A lot of people have been discussing the TRAIN law and how will it affect us. I’ve been reading about it and I’ll be sharing some of the things that I read about with you. Also, I’ll be sharing a Philippines BIR Tax Software that I have been using.

What is TRAIN?

President Rodrigo Duterte signed the Tax Reform for Acceleration and Inclusion (TRAIN) into law last December 19, 2017. It’s the first package among the other tax reform measures to be issued by his administration. It expected to make a considerable impact on the prices of goods and services, take-home pay of Filipinos and their purchasing power.

About 70% of collected revenues will go to infrastructure projects that the Duterte’s administration plan to build. His administration has planned to allocate P8.44 trillion for its “Build, Build, Build” program for 2017-2022. They plan to build more road networks and better mass transportation rides for the public.  These will enhance the economy and create more investment opportunities, thereby creating more jobs or income sources for the Filipinos.

The other projects under the 70% collected revenues are the following: infrastructure for the military, drinking water facilities in all public places and sports facilities for public schools. The remaining 30% will be spent on social mitigating measures and investments for health, nutrition, hunger and education.

What is it to Employees?

Under this law, there is a zero percent tax for low-income earners with an annual income of P250,000 and below. Those with an annual income of P8 million and above are taxed with 35 percent. The 13th month pay and other bonuses at P90,000 and below will remain not to be taxed. This new law lightens the financial burden among low-income earners. With the previous income tax law, about 5 percent is deducted from earners with P10,000 and below income. Those with an annual income of P500,000 and above get to have 32 percent of off their income.

What is it to us Business Owners, Freelancers and Professionals?

For business owners, sole proprietorships and licensed and non-licensed individuals, those earning below Php 250,000 per year will be tax exempt. Those who earn Php 3 Million and below per year now have the option to file and pay for a 3% percentage tax + income tax (paid quarterly) or an 8% percentage tax of gross receipts (paid annually).

Although the 8% percentage tax paid annually may seem attractive, you may want to check what is better for your business. There is still a level where 3% percentage tax + income tax (paid quarterly) is a better option.

Here’s how to check:

One – Download this calculator by a my friend Mark Ong, who is a CPA.

Train bill – compare: Train bill – compare

Second Option – This is a blog from Taxumo, Philippines’ BIR tax software.

TRAIN’s New 8% Tax – Does it really save you money?

What else did change?

The BIR placed a higher tax rate on coal, mining, tobacco, sweetened beverage petroleum, and automobiles. Some may not find it as good news. They fear that companies will increase the prices of their goods for consumers to shoulder the higher tax rates.

What’s next? 

Everyone’s awaiting the other packages and the Implementing Rules and Regulations of the BIR. If you want to know more about the Philippines Tax Reform law, join the workshop of Manila Workshops on January 27. Check it out in this link: http://manilaworkshops.com/events/understanding-tax-reform-for-msmes-self-employed-professionals-freelancers

Personally, our team in Taxumo studied the law and thought about how to easily cascade it to our users. If you haven’t checked out this Philippines BIR Tax Software, you should. It really makes your life as an entrepreneur, freelancer and professional easier. How? Taxumo is the first in the industry to have automated calculations of your tax dues. And guess what? The Taxumo Income Tax calculations now uses the formula from the TRAIN law (RA No. 10963).

Once the Implementing Rules & Regulations are released by the BIR, Taxumo will be updating the forms & formula speedily and accurately to make sure that you’re using the latest forms when you’re filing your taxes.

If you want to try out Taxumo, sign up now for a FREE trial.

My ONE WORD for 2018 — JOY

Last year, I was on an emotional roller coaster. Some days were filled with joy and happiness and some days were just bad. In some days, I felt as if I were on top of the world, while on other days, I felt like quitting. I thought that being busy would make me NOT think about things, but it actually made things worst. My emotions rose and dipped at extreme levels.

Welcoming the New Year wasn’t easy for me either. This is the reason why this (first blog of the year) came in pretty late in January. By the way, I can’t believe that it’s almost the 15th of the month. Anyway, going back to my story, it wasn’t a “happy” new year for me. First of all, joy wasn’t in the air when I noticed that my blog was hacked by some random hacker. This made my host take down my blog for almost a month.

Next, the yaya that we had for almost 5 years just didn’t return after going on vacation. I was furious! It wasn’t so much that she was gone, but it was more of that she didn’t have the decency to tell us that she wasn’t coming back.

And then, the worst thing that happened, was that Zeeka got sick. It’s the worst feeling in the world for a parent to have to bring her kid to the emergency room (again — twice within a month) after having intermittent fever for 5 days. Oh myyy!

But then, that’s life right?

You might be wondering, “then why the heck is her one word JOY after having a few episodes of unfortunate and definitely, sad circumstances?”

I really thought about this for a long time. For the past few days, this sat as a draft in my blog. I wasn’t too sure about the word either, until…

Until one day, I listened to the blink on Blinkist of Don’t Sweat the Small Stuff and It’s all Small Stuff by Richard Carlson. That’s when I realized that being happy or joyful is a choice that we need to make. And I also realized that the things that we deem to be urgent, important and life changing or threatening aren’t always such a big deal.

Maliit na bagay lang pala.

There are things that we don’t have control over. There are things that happen to us that we obviously didn’t wish for, but what we can control is how we react.

So, what I did FIRST was I analyzed why I felt the way that I felt. What I found out was that…

1) Hacking incident – I felt so sad that people would waste time hacking into other random sites of strangers. I was feeling that way because I didn’t know if we would be able to restore it (which we did! Yey!)

2) Yaya Incident – I felt furious because I hated adjusting again to a new rhythm and new way of doing things again, especially that I have a ton of things to do.

3) Zeeka’s sickness – I felt like I didn’t pay much attention to Zeeka last year and I felt like I wasn’t a good mom. That made me hate myself.

So there. I analysed why I was feeling this way, and it was because of things that I could actually control. So what if my blog was down? I could converse with my readers via social media. So what if I had to adjust to a new way of doing things again? It’s not as if I didn’t have new things and ideas every time. Haha! So what was the difference, really? So what if I failed last year at being a mom? I still have a lot of time fixing my mistakes and focusing more on Zeeka this year. Maybe this scenario of being yaya-less is actually a blessing!

So this is why I chose the word Joy. I need to find those little things that I can be grateful for. This word that I have chosen will constantly remind me that life is great. Living is great. Even with the many challenges that I face, I know that I’m strong and I know that I will make the most out of it.

Living a life with no regrets will bring Joy. Saying I have loved will bring Joy. Striving to be the best that I can be will make me happy. Picking myself up after failure will make me love life more.

How about you?

Are you happy? Is you life filled with Joy?