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How the BIR drove me insane during my 2014 income tax filing

Last week marked the most aggravating income tax filing I have ever had the displeasure of experiencing. The Philippine Bureau of Internal Revenue (BIR) implemented an electronic filing system supposedly to streamline services. Good in theory. Too bad it sucks.

I was done with my income tax return (Form 1701 for professionals and self-employed individuals) since mid-March. There are several reasons for this:

  1. I hate rushing.
  2. I only have two steady clients.
  3. I take the 40% optional standard deduction over the itemized deductions.

All this adds up to a really simple income tax return. But because of the rushed roll-out and the lousy infrastructure, the BIR’s eBIRForms  setup resulted in even MORE wasted time and effort. But how much time and effort?

NO, it is NOT that simple
NO, it is NOT that simple

I completed my tax return using the offline eBIRForms software package and printed three copies for manual filing. This is what I did for my previous 2251M (monthly percentage tax) and 1701Q (quarterly income tax) forms. The messenger for our family business was going to file my return along with my February 2015 2251M in RDO 52, except that the BIR refused to accept my tax return because it was a manual filing. I was supposed to register with the online eBIRForms website and file the return online. Okay, fair enough.

  1. Register with the online eBIRForms – done!
  2. Use the offline eBIRForms software to export my tax return to an XML file for upload to the online portal – done!
  3. Upload the XML file to the online portal – WAIT!

No matter how many re-export + uninstall-reinstall combos I did, the exported XML file was corrupt. No, the irony was not lost on me.

I had to wait until the second week of April to do the filing myself because you know, I was busy doing my job. A pro tip when visiting your RDO: get queue numbers for the line you think you should be in and for the Officer of the Day. The line to talk to the Officer of the Day usually goes fast – or at least faster than the lines for actual transactions – so you’ll get to double-check your documents with the OD before you get to the head of the transaction line.

I was ready to duke it out with the OD using non-stop arguments that they HAD to let me file my return manually because their software was buggy. Instead, my consultation with the OD left me speechless for several seconds. The BIR staff, or at least the ones in RDO 52, knew that the software was busted! As per the OD, the exported XML file for Form 1701 is corrupt because they “hadn’t finished” the form in the software. AND YOU DID NOT TELL PEOPLE THIS WHY?!?! They told me to print out the confirmation email from registering to the online eBIRForms site and attach it to my documents so that they’ll accept my manual filing.

Keeping frustration on the outside
How I felt like on the inside. Photo used under a CC-Attribution license.

Needless to say, I didn’t have a copy of that confirmation email on hand so I had to hunt for a nearby internet cafe. Thank you BIR security guard and the guard at the nearby pawnshop! When I went back to file at 12:15pm, the staff in the ITR receiving section were out to lunch! When I caught someone about to leave, he told me to wait for them to come back at 1pm.

Me: “Di ba may ‘No Noon Break’ policy?” [Isn’t there a ‘no noon break’ policy?]
BIR Employee With No Respect for Taxpayers: “Sa States lang yan kasi mga robot sila. Di pwedeng ganyan sa Pilipinas.” [That (policy) only applies to the United States because they’re robots. That can’t be done in the Philippines.]

WTF WAS THAT?!?! The “No Noon Break” policy means that you guys take turns eating lunch so that your desks are never unmanned! The guy had the gall to tell me to go out and eat lunch and come back later. Aww hell no! I skipped my lunch so that I could be the first to file when they came back.

I breathed a sigh of relief when another BIR employee finally accepted my manual filing. I found out much later that I breathed too soon. When I submitted my returns, the BIR guy removed the attached 2307 (certificate of tax withheld) forms, saying that they “weren’t needed”. I found that really weird because you attach the 2307 forms to all of the tax returns you submit as proof that you’ve already paid tax on your income. What the guy didn’t say was that the hardcopies of the 2307s weren’t needed because you are required to submit scanned softcopies on DVD! *headdesk headdesk headdesk*

I want to be a good citizen and pay the “correct” taxes as mandated by the law (whether the existing tax rate is fair is another topic entirely). I really, really, REALLY do. But how the heck am I supposed to do that when the BIR makes it so damned hard?! And bonus: the March 2551M, 2551Q, and 1st quarter 1701Q are due on April 20.

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The Scientist’s Guide to the BIR and Paying Taxes

The University of the Philippines System recently issued a memo that all contractual staff have to be registered with the Bureau of Internal Revenue (BIR) as “professionals” and provide UP with official receipts for services rendered. Unfortunately, project-based research assistants are included in this category. MSI was nice enough to bring in a Certified Public Accountant to give a short talk/lecture about what the new memo means and how to go about the registration process and the additional tax forms we have to submit. That was the first time I’d seen an entire auditorium of MS and PhD students and graduates dumbfounded and confused. I’ve already started the registration process because of my freelance science writing gigs for GMA News Online, which started requiring ORs just last July, so I’m in a better position compared to the other RAs who are just doing it now. I hope this little blog post can help my fellow researchers navigate the murky waters of registering as a professional and what that means for taxes.

Note: This post is not a discussion about whether requiring RAs to provide UP with ORs is right or fair, but for the record, we work for unremarkable salaries, no benefits, no paid leaves, and no healthcare. The visiting CPA fielded a ton of questions about what registration means for ongoing contracts (those with ongoing contracts are essentially f*cked) and the additional tax filings (more on that later).

Continue reading “The Scientist’s Guide to the BIR and Paying Taxes”

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Top 5 lessons I learned from running my own business

geekerie colored logo_smallGeekerie, the little store that Adrian and I started way back in 2008, is now five years old. Five years, countless arguments, blood, sweat, tears, and money later, we’re still growing! As a first-time business owner, the past five years have been a heck of a learning experience. The five most important lessons I’ve learned so far:

1. Do what you love, or at the very least, what interests you.
My mom used to own a very successful corporate giveaways business. It was so successful that it paid for our house, schooling, and family vacations. When she got tired of commuting to Makati every day, which coincided with me about to graduate from college, she offered me the company. I’d be her apprentice for a year before she formally turned the reins over to me. Call me crazy, but I said no. I had no interest in corporate giveaways and dealing with marketing officers day in, day out. I would have had to force myself to work, something I did not relish doing. Seven years later, I’m the co-owner of a shop that I started from scratch. It’s definitely not at the same level income-wise (yet!) as my mother’s former business but Geekerie is mine and is something that I actually want to work on.
Our first customers: our friends!
Our first customers: our friends!

2. Timing is everything.
Successful products are the product of two things: an excellent product and timing. Geekerie started selling Doctor Who fan shirts back in 2011. We debuted the “The Doctor Is In” shirt during the June Toy Convention but received a lackluster response. We only printed 30 shirts and couldn’t even sell them all! Things started picking up in 2012, with our new Police Box shirt, more people looking for Doctor Who shirts, and customers remarking “You’re the only ones selling Who merch!”. By the time 2013 rolled around, we had five Doctor Who shirt designs with print runs of 100 shirts each.
Moral lesson? Give it time before deciding that something isn’t working. Our usual waiting period is a year. If it hasn’t sold by then, then you’re never going to sell it.

toycon-2010-booth-pic-edit_new
2010 Geekerie!
3. Partner with someone who has complementary skills.
Adrian and I work well together because we bring different skills to the table. Adrian is in charge of designing, printing (talking to the printer), and marketing the shirts, plus designing the website. He’s also better at customer relations. I do the bookkeeping, order-taking and preparation, inventory, and other essential “boring”, behind-the-scenes stuff. Adrian can’t run Geekerie without me and I can’t run it without him.
4. Online stores are good, but you still need a physical presence.
We don’t own a physical store because of the high overhead involved, but we can’t operate solely online either. The compromise? Bazaars and fairs! We joined three events this year: the ToyCon (June), Cosplay Mania (September), and Christmas Toyfair (December). These physical appearances are crucial because:
  • It establishes Geekerie as a legit seller. Filipinos are still wary about shopping online, especially with newer outfits. Actually meeting the owners at bazaars instills customer confidence that we’re not out to scam them.
  • Customers get to see the products in person. Filipinos are a very tactile people – we need to see and touch things for ourselves. Plus since we sell shirts, some people are nervous about the sizing.
  • It introduces us to new customers. A lot of our bazaar customers have never heard of us before the event. They see us in person and check out the inventory. Even if they don’t buy during the event, they still get a business card and look us up online afterwards.
This is what we look like at the end of every selling event.
This is what we look like at the end of every selling event.
5. Growth is a must but do it at your own pace.
Every business needs to expand eventually, right? But do it at a pace you’re comfortable with. We started selling shirts in 2008 and a couple of toys in 2011, but it was only last year that we really started selling official merchandise and collectibles. Even then, we started out with a single shipment of items. When that shipment sold out in June, that’s when we started ordering more. The profits we earned over the years were what we plowed back into the business. It’s possible that the slow pace of growth hurt Geekerie in the short-term, but I wasn’t ready to go into debt just in case the business failed. Of course, we all have different appetites for risk so if you’re dead-set on investing your last peso into the business, then go ahead.
This is what we look like at the end of every selling event.
Geekerie in 2013!.

Edit: I can’t believe I didn’t include this in the original list! Anyway, here’s bonus lesson #6:

6. Don’t be afraid to ask for help.
Geekerie wouldn’t be where it is today without the help of a lot of people along the way.

  • My mom, the perennial entrepreneur. She lends us her delivery van and personnel whenever we have a selling event (I’m in charge of paying them, of course). It’s difficult to find people to work just for the events so I’m very glad that I don’t have to.
  • My aunts and uncles who helped me get all the fun and geeky stuff that we sell. My heroes: Tita Marian, Tito Tony, Tito Elfrid, and Tita Ofie!
  • Az, who gave us our first booth space in exchange for free shirts 😛
  • And last but not least, the wonderful friends + customers we’ve had over the years 😀 It’s been an amazing ride and we’d love to have you with us for the years to come.