A report released by the Philippine Statistics Authority states that around 26.2% of the labor force in the country are self-employed individuals. This percentage translates to about 11.2 million Filipinos who are self-employed as of January 2020.
This sub-group of the Philippine workforce comprises self-employed professionals, writers, and other individuals who manage their businesses. Amongst the self-employed are medical doctors, lawyers, architects, engineers, accountants, and other home-based freelancers. Some of the popular freelance jobs are content writing, social media management or marketing, graphics design, virtual assistant jobs, and video editing. They are also aptly called online service providers.
As a part of this group, registering the business with the appropriate government agencies, such as the DTI and the BIR should be high up in your agenda. Registration with the DTI, the BIR, and securing permits legitimizes the existence and operation of your business. It also allows you to take part in various government programs that could help in advancing your knowledge, or enjoy government incentives for the self-employed. Further, it is always an advantage to operate a business with peace of mind.
Self-employed Individuals and Professionals
Self-employed individuals include those who own businesses solely under their names. These individuals usually operate the business on their own. Some are home-based, while others rent small commercial spaces from where they do business. A former employee who now bakes cakes and other types of bread is an example of a self-employed individual. Another one would be someone who has opted to earn through freelancing. These individuals must register their businesses as sole proprietorships. In this case, the business owner solely owns the assets of the company and registering with the Department of Trade and Industry to protect their trade names is the next logical step. It is also best to apply for a Mayor’s permit from the LGU, this permit allows you to operate your business within the city or municipality. Registration with the SSS, Pag-Ibig, and other government agencies should also be given importance, especially when there are employees on board.
Independent or individual professionals, on the other hand, are licensed by the Philippine Regulatory Commission. They are usually accountants, doctors, lawyers, real estate brokers, to name a few, who do business and render services based on their professions. They are not required to register with the DTI since their names are already considered their trade names. However, it is also highly recommended that they register with the Social Services System or SSS, Pag-Ibig, and Philhealth.
Because a self-employed individual and an independent professional usually handle everything by themselves, they rarely have the chance to take care of the various permits, licenses, and memberships on government agencies needed. Some of them hire accounting firms to take care of the requirements for them for a fee. Accounting firms sometimes also act as financial advisers, though on a limited scale.
Taxes as Citizen Obligations
The reason taxes exist is for the country or the government to continue rendering its services to the nation or the population. Taxes are the leading source of the government’s revenues, it’s bloodlife. Our taxes fuel economic growth. They provide a regular source of income for the government to fulfill its obligations to the populace. Taxes also provide the funds for the government’s programs in education, health, and infrastructure development.
Being registered at the BIR also brings forth further validation of your business. Working within a legal framework also allows you to enjoy the other benefits and advantages of a tax-paying self-employed individual or professional. Let us enumerate some:
Proof of Income. Many banks nowadays also require an ITR as additional proof of income. Usually for loans worth millions of pesos. It is easier for an individual to obtain a loan if he presents an income tax return reflecting revenues from the previous year. The ITR and the financial statements add legitimacy to the claimed income, especially if it tallies with the presented bank statements or invoices.
These required documents are for validating the declared revenues of the loan applicant. The income tax returns may be one of the requirements for account opening or for applying for a credit card. Most banks nowadays are strict in validating sources of income from depositors as required by government regulatory agencies.
Even a tourist visa application requires ITR! It will serve as proof that you have a stable source of income to fund your vacation expenses.
Being a registered taxpayer will also protect you from issues of tax evasion. In this age of social media domination, checking lifestyles is not so hard to do. And if your income is not reflective of your lifestyle, it could trigger tax evasion cases against you.
It is always best to register as early in your new career as possible. It will be such an inconvenience justifying why you are signing up so late in the game.
Your trustworthiness and integrity are positively affected when you issue receipts. The act means that you are standing by your products or your services. And could also translate to repeat customers for you.
Our Final Words
Registration as a taxpayer at the BIR is just half the journey. Paying the correct taxes completes it. This act legitimizes the existence of our business as self-employed professionals or individuals. Besides, the advantages and benefits that we gain from it far outweigh the sacrifices we shall endure in the process.
It usually takes several days to complete your business registration, and there are annual re-registration processes that can take hours off your work. There is also the associated stress and frustrations that are inherent in these transactions. Sometimes, you should let other professionals do the work for you. Service providers specializing in registrations remove the legwork from you so you can concentrate on your work.
Apex Business Solutions & Consultancy is one of these firms. Apex will release you from the burden of company registration. We can do the legwork for you to make your business official. It also provides the following services related to company registration:
Registration at the SEC, BIR, SSS, PHIC and HDMF
Assistance on the amendment of Articles and By-laws
Renewal of Business Permits
Also, accreditation at PCAB and other Government Regulatory Agencies
Apex can also help you in other areas such as Financial and Business Advisory, Tax Compliance and Advisory, Accounting and Bookkeeping, and HR and Payroll Administration. If you are interested, give us a ring on our landline at +632 7917 8118, or mobile at 0917 137 0789, or email at firstname.lastname@example.org. Apex leaders are capable, knowledgeable, and experienced in these mentioned areas of business. Call us now, and we’ll help you reach new heights for your business. You can also check out our website here.
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