Draft order proposes lesser taxes for small farmers
07/06/2009 | 05:44 PM
MANILA, Philippines - Small farmers may be allowed to pay lesser taxes under a proposed order expected to hike their income and thereby boost the Philippines’ agriculture sector.
If approved, a Bureau of Internal Revenue (BIR) draft order will disallow millers and other agricultural corporations from passing on a one percent withholding tax to planters.
Currently, millers and agricultural corporations – which buy produce from small farmers – are authorized by the BIR to collect the said tax.
The proposed order, which intends to amend Revenue Regulation 2-98, initially exempted small rice and corn farmers. It was later expanded to cover planters who harvested coconut, copra, sugarcane, cassava, coffee, fruits, vegetables, marine food products, poultry, and livestock.
Under RR 2-98, payments made by the Philippines’ top 20,000 companies to their goods supplies – including agricultural produce – are subject to a one percent creditable withholding tax, regardless of purchase amounts.
However, under the proposed regulation, farmers whose gross sales exceed P300,000 for the whole year lose their exemptions.
To qualify, farmers “must be suppliers from whom the top 20,000 corporations or the top 5,000 individual taxpayers regularly purchase agricultural products in their original state," the draft BIR regulation said.
Moreover, small farmers must have a minimum of six transactions with companies belonging to the top 20,000 corporations or the top 5,000 individual taxpayer to enjoy the exemption, the proposed order said.
The proposed order, which is expected to be approved by Malacañang soon, does “not totally" exempt small farmers from the withholding tax, the Department of Finance (DOF) said.
They are still required to file their income tax returns, after all, the DOF said. - GMANews.TV
If approved, a Bureau of Internal Revenue (BIR) draft order will disallow millers and other agricultural corporations from passing on a one percent withholding tax to planters.
Currently, millers and agricultural corporations – which buy produce from small farmers – are authorized by the BIR to collect the said tax.
The proposed order, which intends to amend Revenue Regulation 2-98, initially exempted small rice and corn farmers. It was later expanded to cover planters who harvested coconut, copra, sugarcane, cassava, coffee, fruits, vegetables, marine food products, poultry, and livestock.
Under RR 2-98, payments made by the Philippines’ top 20,000 companies to their goods supplies – including agricultural produce – are subject to a one percent creditable withholding tax, regardless of purchase amounts.
However, under the proposed regulation, farmers whose gross sales exceed P300,000 for the whole year lose their exemptions.
To qualify, farmers “must be suppliers from whom the top 20,000 corporations or the top 5,000 individual taxpayers regularly purchase agricultural products in their original state," the draft BIR regulation said.
Moreover, small farmers must have a minimum of six transactions with companies belonging to the top 20,000 corporations or the top 5,000 individual taxpayer to enjoy the exemption, the proposed order said.
The proposed order, which is expected to be approved by Malacañang soon, does “not totally" exempt small farmers from the withholding tax, the Department of Finance (DOF) said.
They are still required to file their income tax returns, after all, the DOF said. - GMANews.TV
