Why Sari-Sari Stores, Carinderia and other Marginal Income Earners Must Register with BIR

The Bureau of Internal Revenue recently issued Memorandum Circular No. 7-2014, clarifying the issues relating to the registration and tax compliance requirements of Marginal Income Earners (MIE). The circular provides that an MIE refers to an individual not deriving compensation as an employee under an employer-employee relationship but who is self-employed and deriving gross sales or receipts not exceeding P100,000 in any 12-month period. Moreover, the activities of such MIE should be principally  for subsistence or livelihood. The term includes, but not limited to, agricultural growers/producers (farmers/fishermen) selling directly or indirectly to ultimate consumers, small sari-sari stores, small carinderias or “turo-turos”, drivers/operators of a single unit tricycle, and such, but shall not include licensed professionals, consultants, artists, sales agents, brokers and others similarly situated, including all others whose income have been subjected to withholding tax.

It’s safe to assume that many, if not almost all, sari-sari stores, carinderia and other MIEs are not registered with the BIR. These small businesses are now required to register with the BIR, to issueregistered receipts/ sales invoices, and use registered Books of Accounts (refer to the full text of Memorandum Circular No. 7-2014 for the rest of the requirements). It’s also safe to assume that most MIEs are not aware of the new requirements and we’re certain that the new set of regulations is going to be very, very unpopular (but as the BIR Commissioner noted, her job is to collect taxes, not to be popular). Now, if we’re tasked to look at the positive side and forced to defend the rules/requirements on Minimum Income Earners, we’d come up with these four reasons:

BIR must simplify rules

Big corporations and professionals have a hard time dealing with tax requirements. Small and medium enterprises (SME) understandably have the same problem with tax compliance requirements. These business entities have the option of hiring accountants. MIEs, owing to the fact that they’re subsistence income would hardly be enough to hire bookkeepers or accountants, must fully understand the new tax rules and the compliance requirements. For instance, MIEs should know how to properly fill up the Books of Account (what on earth is that, you ask).

The challenge for the BIR, therefore, is to make it easier for ordinary folks to understand tax rules and requirements; otherwise, considering the initial resentment expected from the imposition of the MIE tax requirements, the BIR (or the appointing authorities) may reap the backlash from the “masa” who are marginal income earners. A better and simplified system for MIEs, once in place, should spill over and benefit the rest of the taxpayers.

MIEs must factor costs of doing business

Every business, MIEs included, must incorporate all items of expense in coming up with the price of their goods or services. Taxes and incidental expenses on tax compliance requirements, must be factored in by the MIE (in fact, MIEs engaged in the food business have the added burden of complying with the new fees and requirements). Any additional cost is really a bitter pill to swallow, except that reasonable expenses for tax/regulatory requirements are necessary expenses in business. If MIEs will be “forced” to accept the new tax requirements, perhaps it would not be as hard to convince them to factor other aspects of effectively doing business.

Positive effect on regular taxpayers

We’ve heard a few ask, “Why not go after the big fish?” Valid question. However, the issue of going after the big fish (and the BIR will say that they are, in fact, running after the big fish) is entirely different from the issue of tax compliance for MIEs. If every Filipino is meant to benefit from taxes, then every able Filipino should also pay taxes. Regular taxpayers, including teachers and other government rank-and-file employees whose salaries are automatically deducted with taxes, may derive psychological upliftment knowing that everyone is on the same (tax) boat.

Stake in governance

Here’s the best part — because everyone feels the pinch in paying taxes and complying with tax regulations, everyone will have a stake in how government is being run and how taxpayers’ money is being spent. This much has been demonstrated by the people’s extreme anger over the PDAF issue. Maybe everyone will start taking their votes seriously. At the very least, anyone paying income/business tax has the moral, legal and financial reason to DEMAND that every cent of public money is accounted for and that government office is treated as a public trust. Every MIE, together with other regular taxpayers, will demand that the corresponding government service and support must be faithfully discharged in return for the payment of hard-earned taxes.

What do you think of these requirements? Positive or negative? Use the comment section below for your comments or discussions.

18 comments

  1. BIR may be seen as harsh with these rules, although we must remember that sari-sari stores and similarly situated establishments also do business. Bakit naman di sila kasama kung tayong ordinaryong manggagawa nga eh pinapatawan ng buwis. Minsan nga may mga kotse pa yang mga may-ari ng sari-sari store lalo na sa mga squatter area. Fair lang naman itong ginawa ni tukayong Kim.

    1. Ako po ay mayroong small sari sari store. Nagbabayad po ako ng mayors permit sa caloocan city hall. Pinadalhan ako ng sulat from BIR tungkol dito sa Registration na kailangan. Kaso lang po meron daw po akong penalties na kailangan bayaran starting sa taon na nagsimula ang tindahan ko at mabigat na po yun para sa akin. Sana kung ngayong taon ako magsisimula. Nalilito po talaga ako kung paano ko gagawin, ipasasara ko nalang sana kaso bayad na po ako sa Mayors permit ngayong taon.

      1. Ok lang yan 🙂 kasama sa negosyo yan ! nandto lang ako para sayu ‘ mag meet tayu eto number ko 0910567556_ hulaan mo yung isa 🙂 pasalamat ka isa lang yung iba nga tatlo e

  2. Grabe naman yang tax kahit mga candy lang ang tinda at maliit na sari-sari store lang kailangan pa ng permit. Paano kikita ang mga maliliit na tao nyan kung mauuwi lang sa tax ang kikitain nila. Parang kami ang nagpapagod habang ang iba naman ay nabubusog sa pinagpaguran namin. tsk…

  3. Is it required to submit real property tax in order to get business permit for a sari store? A munisipyo in Pinagkursan Alitagtag Batangas is obliging a new small sari sari store owner to produce the said document.

  4. Guys need your honest opinion. Today lang ako magstart magbasa ngayon lang na ayos leave ko at lahat2x bumagsak ako last year kakayanin ko pa ba humabol? As in today lang talaga ako magbubukas ng law books.. salamat

  5. the reason they don’t go after the big fish is that they are all in the Government already the BIR included, clean up your own house first BIR

  6. I am a full-time accounting instructor and I have decided to just have a part-time position next semester so that I could spend much of my time with my son. Moreover, I really wanted to open my own business for I believe that this could provide us financial freedom especially that we are expecting a lot of opportunities as we geared toward ASEAN 2015. However, my capital is not yet enough, so I have planned to put up a sari-sari store in our SMALL subdivision with a SMALL target market just to have a maximum daily GROSS cash inflow of two hundred pesos (P200). Indeed, this is a very small amount and the net income per month could not compensate even 25% of the benefit which will be forgone per month once I leave my full-time position.

    Thus, with all due respect to the policymakers, I think I should not register anymore because with the very limited amount that I will earn from the said sari-sari store, it will be very unfair for me if I will spend time, effort and money for the registration and payment of tax.
    I am humbly suggesting that you create a CLEAR and ORGANIZED RUBRIC because most of implemented policies are not actually applicable to some/most of the concerned individuals. For one kind of income, a policy may be appropriate to some taxpayers, but may not be to the others. It should be considered that there are several business situations. For example, before tax can be collected, enough grace period should be given to a new business entrant whose investment was just borrowed.

    Please revisit most of the tax laws. My husband is also an instructor and the tax he pays is very burdensome. Unfortunately, he is entitled to claim a deduction for only one dependent (our son), when in fact, we have four other dependents, my sister, my two brothers-in-law and the nanny of our son.

    1. I agree with with @AMAR.

      I am also an accountant working overseas. I set up a small sari-sari store in our place to give my wife something to kill the boredom and earn something at the same time.

      Today, as I am preparing for the renewal of our business permit, I tried to ask around all other sari-sari stores in our locality (10 maybe), I felt somehow disappointed after knowing that only my wife’s store has a valid business permit.

      Now, I have second thoughts about renewing my business permit or not.

      The problem with our policy makers is that they are doing thier job in the comfort of thier airconditioned rooms. White it is true that collecting taxes is their sworn duty, but alongside with that duty is their moral obligation to ensure that every policy they are going to implement should be applied fairly and efficiently.

      If they can simplify the process in business registration, maybe they can reach their target collection that raising more taxes.

  7. i have a sari-sari store here in la trinidad,benguet,i processed all the necessary papers regarding its legality which include the BIR receipts etc.My total sales is aprox. 1k to 2k
    during school days and 500 pesos additional during weekdays.I issue OR for those who ask for it and sometimes offer it to some customers para magamit yung resibo.This February some BIR employees visit our store for TAXMAPPING daw,there are questions asked and answered until they checked the receipts ,”bakit po kulang yung color green ng 3 pages”?mapepenalty po kayo,.then she wrote a little note dalhin ko daw sa BIR office within 5 days.After a couple of days nagpunta ako sa BIR with that note explaining to them that about the 3 pages missing on my receipts and im shocked that the teller is asking me to pay the penalty which is 5,ooo pesos per page daw.”Ma`am sari-sari store lang po yan,saan ako kukuha ng 15k na ibabayad jan”she said”yan po ang batas kausapin nyo na lng po si boss sa loob makiusap kayo.So nagpunta ako sa boss daw after a few minutes of conversation with the BOSS,he told me na kahit gawin na lang nating 1k,kasi po yan talaga ang batas magbayad po kayo sa china bank,ibalik nyo po ung resibo sa teller para po ma encode na.The reason why i`m sharing my experience is to let others know na ingatan po natin ang resibo and to share others that we are living in hell with our SYSTEM,gusto lang po nating mabuhay ng marangal kahit sa konting kita,pero harap-harapan tayong pinapahirapan at ninanakawan ng SISTEMA.

  8. Grabe talaga ang BIR! para na nga lang sa pang araw2 mong kabuhayan ang pinagtatrabahuan mo kukunin pa nila. Buti sana kung nakikita mo ang napupuntahan hindi eh! kinukurakot lang ng mga BUYAKAW AT MAGNANAKAW na tauhan ng gobyerno. Habang ang mga Marginal Income Earners ay hirap na hirap kumita at the end of the day kukunin din lang sa kanila ung pinaghirapan nilang kitain. Mga walang hiya talaga. Walang awa sa mga mahihirap na sinusubukang paunlarin ang buhay kahit sa simpleng paraan lang. Kaya di umuunlad ang bansa eh! pano kasi hihikayatin ang mga mahihirap na gumawa ng mga livelihood programs pero pagkatapos kukunin din naman sa kanila ung kikitain nila doon. isa pang malupit, kakasimula palang ng sari2 store mo so given na ung mga makikita mo sa mga sabihin na nating 1st 4-6 months pambayad mo ng utang mo pang capital. ang nangyayari pa di mo alam ung mga kelangan mong bayaran na taxes KUNO? magugulat ka nalang my darating na sulat mula BIR na pinagba2yad ka ng ilang LIBO dahil daw d ka nag file ng ganito ganyan. EH DI WOW! WOW NA WOW TALAGA!!!! my goodness Philippines!!! baon ka pa nga sa utang pang capital sisingilin ka pa ng libo libo ng PUTIK na BIR na yan!!! Yan ang gobyerno ng pilipinas! yan ang batas ng pilipinas! asan n ung THE LAW IS FOR THE PEOPLE??? kasi sa nakikita ko PHILIPPINE LAW HARMS THE PEOPLE ESPECIALLY THE POOR… kaya imbis na bumabaliktad ang tatsulok mas lalo pang dumarami ang nasa ilalim. though given na dahil my mga sadyang tamad talaga kaya d umuunlad ang buhay, SANA NAMAN TULUNGAN NALANG NG GOBYERNO NATIN UNG MGA TAONG NAGSUSUMIKAP PAUNLARIN ANG BUHAY IMBIS NA PAGNAKAWAN PA PARA TAUNG LAHAT EH GUMINHAWA ANG BUHAY. 🙂

    DEAR POLICY MAKERS AND ENFORCERS: may mga matatalino kaung utak sana gamitin nio yang katalinuhan nio sa mabuting paraan. PLS CONSIDER SIDE BY SIDE ang mga kalagayan ng mga mamamayang Pilipino sa pagawa nio ng batas. While it is true that we have a law, SANA NAMAN MANAIG PA DIN ANG MAS NAKAKABUTI SA MGA TAO dahil ang batas tao rin lang ang gumawa at ang tao ay nagkakamali. so kung ano ung mas pabor sa tao d un nalang sundin!

    Sa mga enforcers NA WALANG HIYA, TIGILAN NIO NA ANG PANGU2TONG SA MGA PILIPINO. sa halip na magnakaw kau ng pera ng my pera ayusin nio nalang mga trabaho nio at pakitunguhan ng mabuti ang mga nagsisipunta sa mga opisina ninyo dahil yang mga taong yan ang nagpapaweldo sa inyo kaya mahiya kayo! at utang na loob din ituro nio nalang sa kanila ung tamang dapat gawin sa mga taxes nila kasi di nila alam, hindi ung peperahan mo pa sila at bibigyan ng resibo sabay sabing “BASTA BAYARAN MO YAN! KUNG AYAW MO KAUSAPIN MO SI BOSS”——-lintik na boss yan nagpapalaki ng tiyan kakanakaw sa mga tao! humanda ka boss baka punutok tiyan mo ng wala sa oras dahil sa PAGNANAKAW MO! —maniwala ka sa karma 🙂

  9. Ok lang magbayad ng tax duty natin un.sana naman maging patas ang BIR o iba pa agency ng gobyerno.magsurvey sa bawat barangay kung lahat ba ng may negosyoo malaki or maliit may permits.kung wala ipasara para naman fair dun sa mga sumusunod.

  10. what bir fails to see is that marginal income earners like fishermen and farmers usually earn much lower than minimum income earners, who are exempted from taxes.
    so why go after all the marginal earners? maybe they have to revisit rules and deal with this gap. kawawa ang marginal earners because for most of them their income highly fluctuates, and the tax filing and provision of proof of their income and expenses seem excessive given that most of them are illiterate and could not afford for bookkeepers, live in remote areas, etc.

  11. ask ko lang po di ba pwedeng I sang permit na lang gamit in ko . last time kasi nasilip ng inspector ng munisipyo ang comp shop namin sa totoo lang po hindi na bumebenta ang store ko minsan nga po 50 pesos lang ang benta namin .tapos sa shop naman minsan ala player madami na din kasing my shop at store dito Kaya ang Dami na namin kacompete. malaki po ang hinihinging fee sa amin a munisipyo na parang di naman po ata fair na magbabayad ulit kami samantalang madami po sa barangay ang walang permit. sana exempted na ang barangay sa business permit lalo na at mababa naman ang income. salamat po mas mabuti na in me maliit na negosyo kesa po na umasa sa government natin ng tulong kada buwan. sana trabaho ang ibigay nila hindi pera .nay gain po sana hakbang ang atingg bago ng president about sa bagay na ito. . salamat po

  12. May karenderya yung mama ko, Kung ano kumikitang nya kailangan pa, puntahan kami ng governor kailangan daw namin kumuha ng business permit, kaano yan small business lang ng mama ko yun, naghihiram pa siya 500.00 sa akin para may mailuto lang, at puro utang pa last mga customers nya rising sabado ang ibayad ung iba Di Na nagbabayad tinatakbuhan ns lang siya yung iba ang Dani alibi para maka delay ng ibayad.. pag wala siyang mahiraman ng Pera.. Sarado ang tindahan.. doon Na Ron kasi siya kumikitang ng income sa pang are are naming gastusin, Sabin kape, bigas at ano ano pa.. nag 5/6 Na nga lang siya eh, at Umaasa manalo sa lastwo para Nabataean ung utang nya

  13. No, we should not just pay taxes and let them treat us like Slaves or even wore work animals!
    TAYO NA LANG LAGI DINIDIKTAHAN, TINATAKOT, NINANAKAWAN!
    Nakakapagod na, dapt tayo ang pag silbihan at hindi tayo nabuhay para buhayin sila!!
    hindi natin slaari at lalong lalo nahindi natin Sila Diyos!
    Hindi tama at makataRUNGAN NA BASTA na lang kunan ng TAX at hindi tayo Tuntulungan ng Gobyerno a Meralco sa Globe Sa Smart mga over charges nila kasi nga bakit pa tayo tutulungan ng mga yan eh nasa kanila na tAxes natin.
    Tapos yang mga Big COmpanies na yan makakakuha p[a sila ng lagay at br4ibes bukod sa taxes.
    Baguhihn na sistema.
    May karapatan tayong baguhin tong bulok na sistema.
    Taxes onluy for a deserving government and not for A Self Serving Government!

  14. Para sa akin, dapat may baguhin sa sistema ng pangongolekta ng buwis. Yung business ko parang malaki kasi may copier at 2 tao ako. Kumikita naman ang business ko. Ang problema, may gamot akong 10,000 kada buwan. Ang gusto ng BIR declare the gross sales (puhunan + mark up) tapos kuhain ang 3%. Pagdating ng 3 buwan saka ipakita sa BIR Form ang mga cost of sales at expenses. Yung friend ko na accountant sabi sa akin hindi ko pwedeng ibawas na medicine costs ang mga gamot ko kasi masisilip daw ng BIR. Eh totoo namang yun ang cost ng gamot ko kasi Bipolar ako. Kung hindi ako iinom ng gamot, hindi ako magpa-function ng normal. Kumikita ako pero kulang na sa gamot ko, upa sa tao at upa sa pwesto ang kita ko at yung 3% of gross sales na dapat i-declare ko ay sobrang bigat para sa akin. Uunahin ko pa ba naman ang taxes kesa sa gamot? Hindi rin pwedeng wala akong 2 tao dahil ang sakit ko ay bigla-bigla na lang dumarating. Kapag sarado ang tindahan ko, saan ako kukuha ng pambili ng gamot? Tatlong beses na akong tinanggal sa trabaho kasi nagka-episode ako sa opisina.

    Sana ren si BIR may magagaling na lecturers sa bawat barangay na regular na nagtuturo kung paano gagawin yang mga books of accounts, forms na kailangang i-submit at kung kailan dapat i-submit. Kahit ako ay nakapag-kolehiyo, hindi naman namin inaral ang bookkeeping. Nag-introduce sila ng E-BIR, maganda sana, kaso hindi naman lahat may computer at internet sa bahay. Mayroon silang free computers sa BIR pero parang 1 hanggang 3 computers lang ang mga nakita ko sa BIR satelite offices na napuntahan ko. Kung lilinya ka, paano na ang business mo kung ikaw din ang tagabantay. May nakausap nga akong taga BIR tapos sinabi nya “kung nakapagbusiness may kakayahang bumili ng computer”. Talaga lang? Eh paano ang mga seniors na may business, hindi naman nila kinalakhan ang computer. At hindi lahat ng senior ay may anak o millenial na pwedeng gumawa ng BIR Forms nila.

    May mali talaga sa BIR, sa sistema ng BIR. Sana yang sinasabing Chang Scamming ay unang tugunan ang taxes kasi ito talaga ang concern ng bawat mamamayang Pilipino. Kahit saan ka pumunta, may pinag-aralan o wala, namamasukan o may business, mayaman o mahirap nagbabayad ng taxes.

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