Here Comes the Taxman!

in #life5 years ago (edited)

Income tax.jpg

I was in another city for 2 days to take care of all the business tax registration. I have gone through hoops just to become a law-abiding citizen. And mind you, I'm not really used to it. I admit that I'm kind of new to all this tax madness. When I think of all the hassle, it makes me want to just quit everything and live quietly in the woods. But of course, even simple living is a luxury for me. Then I'd be what? 45 or 50 when I can finally afford that kind of freedom - and it sucks.

When I was still an employee, someone had to take care of all my tax deductions or the convenience of taking a big chunk out of my pay. Now that I have my own business, I have to understand how this whole tax thing works. Apparently, I still can't afford to have an accountant so I have no choice at this point.

Yesterday, we had this thing called 'tax seminar' where new business owners are required to sit and listen to how we will be losing all our hard-earned income straight away. And how we are about to feed our beloved politicians here. There was this old lady beside me who has a little store in the village. She was telling me how she's just breaking even and how they still have to tax her for everything. She was also penalized for registering her store late and all that. In this part of the world, it's always the low-income earners and small businesses that get taxed heavily.

Honestly, I don't know how taxation works in other countries. It could be worse. I barely make anything at this moment and I am still struggling to get by. For me, the top 1% are those who can afford basic needs, and unfortunately, I'm not one of those. I don't even have my own home. But I'd be generous enough to give my last food to those who are in need - the authority.

I sat there and listened to the explanation about the confusing calculation. Sure, the tax might not be as grand as it is in other countries. But for those who are earning peanuts, this is huge for us. And for a country suffering massively from corruption, tax hurts the poor more.

So, it's going to be like this for a single proprietor:

Every year I have to pay for the Annual Registration Fee. Then I have to pay the Quarterly Percentage Tax, Quarterly Income, and the Annual Income Tax.

The Quarterly Percentage tax is 3% of Gross Sales (if you are earning less). That is to be paid 20th day of the following month after the end of the quarter.

Then there's the Quarterly Income Tax. If I am going to factor in all the deductions for this quarter, (travel, rent, electricity, water, and other business-related expenses), I will actually end up with no taxable income. However, I still need to file it regardless as the taxman is very notorious with late filing fees.

If you don't want to go through all the trouble of 'itemized deduction', there's this thing called optional deduction or 40%. I am just not sure if I will go for the 40% as it sounds huge to me. But then the itemized is too crazy that I might hire a proper bookkeeper for that - but I just can't afford at the moment. Now I am reading this 8% income tax rate option for self-employed individuals or those with income that don't exceed the GST or value-added tax threshold. However, the good thing is that if your gross income is less than some amount, you are exempted from paying the Quarterly Income Tax return.

So basically, this is what you have to go through if you are starting your own business. And to resolve this, I applied for the 'tax exemption' program. This will not exempt me from the 'Percentage Tax' though. I cannot also have both the 8% income tax option and tax exemption. I still have to file the 'Quarterly Income Tax ' as 0. Anyway, the tax exemption program is for micro businesses and startups with less than some amount in value and assets. Or for those who only contribute to about one-third of the country's total income (sounds like me!). This program aims to scale up small businesses - helping them drive the economy better (sounds like me!).

The perks of this tax exemption program:

  • Accredited business are waived of only paying the income taxes arising from operating expenses. However, they will not be excluded from paying transaction taxes and other percentage taxes.

  • Small businesses are allowed to pay their employees below the minimum wage (it sucks for the employees!) which is otherwise not permitted by law. However, they are still required to pay for their employees' health care, insurances, among others.

  • Financial institutions will be given incentives if they provide loans to accredited businesses. They also have to provide a special credit window for these small businesses.

  • There is also some 'Growth Assistance'. Some institutions have allocated funds to help with technical support.

And so, I applied for this program and I hope I will get approved soon. The income tax is just way too unfair and complicated for me.

I'm sorry you have to bear this post about tax, I know Steemit is not the right place for this, ha! Anyway, what is the tax system in your country? And what do you think of the tax exemption program above? Do you have the tax exemption program too?

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"In this part of the world, it's always the low-income earners and small businesses that get taxed heavily."

Here it is the middle class that gets hit the hardest. The rich get a bunch of tax cuts and loopholes to exploit. If a person makes less than (I think) $5,000 a year they pay no taxes on their income but a person really can't live on that to begin with.

I am sorry to hear you are having to deal with all that hassle, it always sucks when you spend all your time working and the government has to come and take almost half of it.

The rich get a bunch of tax cuts and loopholes to exploit.

This is so true everywhere!

I am sorry to hear you are having to deal with all that hassle, it always sucks when you spend all your time working and the government has to come and take almost half of it.

And knowing that some of it will go into their pockets.

Just reading that was painful. I pay a professional to do mine. I view it as my time vs. my money and in this case, my time is worth more than what I would save by doing it myself. Plus it avoids any difficulties that might arise if I did something wrong. I hope your business gets up and running well soon so you can do the same!

Yeah I want someone else to do this for me! It's so annoying!

I upvoted your post.

Best regards,
@Council

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