• The root of the problem: Matuwid-na-Daan’s BIR

    6

    A THANK you is in order. Revenue District Officer of RDO No. 39 of the BIR, Ma’am Editha A. Calipusan, replied to my last column about what I have called my BIR woes. In her email dated January 18, Ma’am Calipusan explains why the fees would change from the first time I asked about penalties, to the time when I went back to actually pay those fees: waiting three months to pay means being penalized for each of those months.

    Which I understand. But which also presumes that freelance writers like myself, who cannot count on any regular salary, can have P60,000 pesos in savings at any given time. I don’t. And I’m pretty sure that is true for many contractual workers – which is essentially what I am. That I took three months is a measure of how long it takes to raise that kind of cash – and I wouldn’t even have been able to without the kind heart of a good Samaritan.
    Would it have been too much to ask for some kindness from the BIR, too?

    A little kindness, a lot of stress

    Ma’am Calipusan, thankfully, was willing to extend some kindness, and as I said in my last column, she brought the total penalty back down, closer to the P60,000.

    But that kindness cannot be said of the rest of her office. Nor can it be said of the process that has taken us two and a half months already. Add to that the three months spent raising cash for the penalty, and that’s almost six months just trying to get a receipt so that I can continue paying my taxes.

    Ma’am Calipusan addressed what has slowed down this process. In her letter she says that they “have already admonished” the BIR Officer’s Assistant (who would only sign so many forms in a day) “to render service without making any self-imposed limitations with a strong warning that any similar incident in the future will be dealt with accordingly.” They have also advised banks that they have to “accept tax returns regardless of the volume,” as doing otherwise is contrary to the MOA they signed with the BIR re tax payments.

    Again, a thank you is in order. Here’s hoping that my transfer to Mandaluyong RDO will happen more swiftly than the time spent just trying to get out of this Quezon City RDO.

    Ma’am Calipusan says though that the forms I needed to have signed cannot have been two reams of paper. I say: it sure looked like two reams to me, including forms 2551M, 0605, 1701. The P1000.00 I’ve spent on these printouts is already more than the cost of two reams of paper.

    And lest it’s not clear, it is the amount of money and the amount of time and energy that is unjust about this process of getting a receipt for a freelancer like me. For someone who accepts one’s mistakes, and is willing to be penalized for it, for someone who has raised the cash, would it hurt the BIR to make the process quicker so we do not waste our taxpayers’ time?

    Freelance versus self-employed

    This is yet another reason to make a distinction between a freelance contractual cultural worker like myself versus a self-employed professional like a doctor or lawyer or certified public accountant with their own practice. The latter can keep their own office, have an employee or two to keep the clinic or office open while they are away. Money will be earned even if they are not there.

    A freelance writer’s time away from her desk and computer is money lost. If I were the one spending the past two and a half months going back and forth to the BIR to get my receipts, that would have meant missed deadlines and lost opportunities. There is no certainty in the work that I do, and I need to be writing at any given point, giving opportunities due attention. There is no “keeping the office open” when there is no office to speak of, no staff or employees to count on, no one else really in this “non-business” of the not-self-employed.

    I don’t employ myself and I don’t have my own practice or office. I am hired contractually as a freelance writer. I am a cultural worker who does not have a relationship with any of my employers.

    I’ve been thinking about this distinction because Ma’am Calipusan reminds me in her letter that in fact, “the term self-employed individuals was already being used even before the present administration.” She also says that under the Tax Code, “Among the self-employed individuals are the professionals (e.g. doctors, lawyers, writers, talents, etc.). Professionals render work or service for another person, natural or juridical, in the absence of an employee-employer relationship. Self-employed professionals covered by a contract may also be called contractual workers.”

    But therein lies the problem: contractual workers are not the same as self-employed professionals. Freelance cultural workers are not the same as professionals like doctors and lawyers who are essentially self-employed in their own businesses.

    This is the distinction that the tax code fails to make. It is also what Matuwid Na Daan has failed to straighten out in the six years on this righteous path.

    Against cultural work

    And it’s not even difficult to see how different these two types of professionals are, and how they cannot fall under the same category and be taxed in the same way. In the Tax Reform Act of 1997 it states that “every individual subject to income tax under Sections 24 and 25(A) of this Title, who is receiving self-employment income, whether it constitutes the sole source of his income or in combination with salaries, wages and other fixed or determinable income, shall make and file a declaration of his estimated income for the current taxable year on or before April 15 of the same taxable year. In general, self-employment income consists of the earnings derived by the individual from the practice of profession or conduct of trade or business carried on by him as a sole proprietor or by a partnership of which he is a member.”

    This section does not at all define a freelance cultural worker. We are not self-employed, nor are we “sole proprietor” or “partner” in a business.

    We also cannot know or estimate our income for any given year. I could be fired from any of the work I’m doing right now; I could get more writing gigs this coming year. There is no telling what kind of money I might earn on any given month; often, earnings from a good month will be spread out across the months when money isn’t coming in.

    This is not a sob story, nor am I asserting that we should not pay taxes. I am saying that the process has to be different because we are different. We are NOT self-employed professionals like lawyers and doctors, accountants and dentists.

    I am saying that on this Matuwid Na Daan’s BIR, an injustice has been done to all contractual cultural workers and freelance creative laborers. And this does not mean just freelance writers like me. It cuts across TV, film, and theater production staff and talents, across University lecturers and part-time teachers, contributing photographers and artists, one can go on and on.

    These are people who already earn so little, with no benefits to speak of, and who are without job security. For this government’s BIR to treat them in this way is at the heart of why I am done with Matuwid Na Daan.

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    6 Comments

    1. Distinction between self-employed professionals and contractuals should really be made. I work as a reseacher and I have yet to receive my payment for two months now, I’m getting anxious as the monthly tax due is nearing. The BIR has not answered me regarding this problem as they only care about collecting tax and penalties. Hopefully, a tax adjustment for contractuals will be made sooner or later. ?

    2. Hi Katrina. This is unfortunate. Even BIR is targeting marginal income earners like tricycle for hire and sari sari store owners.

      Going back, I wanted to ask you if you have applied for BMBE and if you did qualify, what is your experience with this status? The #1 benefit of being a barangay micro enterprise is tax exemption from BIR for 2 years and #2 which I don’t hear often is it makes reporting easier to the BIR.

      • I forgot to mention I’m an online seller. I have not sold any items yet but I have failed to file my return, late by 30 minutes, and was imposed a 1,000 pesos penalty. It’s strange that I’m a BMBE, exempted from income tax but if I file late, I receive a stiff penalty.

      • If their e filing system was not down for the entire evening on the last day, I would not have been tagged. But this was totally unexpected. Wish they took care of their servers or extended their deadline for atleast a day due to server malfunction on their part. Im just thinking this could have been exploited easily to increase their collection by preying on unsuspecting taxpayers. My initial impression.

    3. taga palm springs on

      Why so oppressive the fines imposed by the BIR to Filipino citizens? Here in America there’s a designated penalty but not the way in the Philippines to kill the tax payer in fines or penalties!

    4. A revolution against the unjust taxation is what we need, the greatest part of it going to: interest payments and recycling of principal payments to unnecessary national debt to Western International and local bankers; to horrendous disguised taxation in the form of price gouging of privatized public services (such as electricity and water), and then ruling political class corruption (which you identify today with the Daang Matuwid but falls under the generic Yellow Movement)… the BIR is also corrupt to the core as even the few kiind souls there are actually keeping mum about what their colleagues and their Commissioners do (and maybe what that kind person herself also does outside of Katrina’s case)….