Entrep - Summary Report Sophia Ganda

Name: SOPHIA “GANDA” GABUAT
CHAPTER #13
REPORTER #08
#10. UNDERSTANDING BUSINESS TAX OBLIGATIONS
WHAT IS TAX?
-It is a compulsory contribution to state revenue, levied by government on

workers’ income and business profits, or added to the cost of some goods,
services and transaction.
WHO IS THE TAX PAYER IN THE PHILIPPINES?
-It is classified into two types: corporate and individuals. Those who fall on the
individual tax payers category, are those who are either employed (or a
compensation income earner, which includes minimum wage earners) or self-
employed.
WHO REGULATE AND CONTROL THE TAXATION IN PHILIPPINES?
-The Bureau of Internal Revenue (BIR)
WHAT IS THE CONNECTION OF TAX IN ENTREPRENEURSHIP?
-Doing business and earning from it gives an entrepreneur an obligation to pay

taxes and to avoid financial, moral and legal problems. Entrepreneur must also
understand their tax obligations because it is their way of giving back to the
government the support in social service and infrastructure facilities that directly
and indirectly helps their business activities. (“Give and take”)
WHAT ARE THE FOUR MAIN TYPES OF NATIONAL INTERNAL REVENUE
TAXES?
-There are 4 main types of tax which is administered by Bureau of Internal

Revenue (BIR) which are: INCOME TAX, INDIRECT TAX (Value-added and
Percentage Taxes), EXCISE TAX and DOCUMENTARY STAMP TAXES.
Now, we will discussed those type of taxes mentioned above.
1. INCOME TAX – is a tax imposed on individuals or entities that varies with

respective income or profits. It is generally computed as the product of a tax rate
multiply by taxable income. Taxation rates may vary by type or characteristics of
the taxpayer and this rate may increase as taxable income increases. It can
come from sources such as wages, salaries, dividends, interest, royalties, rents,
gambling winnings and product sales.
2. INDIRECT TAX – are applied on the manufacture or sale of goods and

services. It is a tax collected by an intermediary (such as a retail store) from the
person who bears the ultimate economic burden of the tax (such as the
consumer). Some examples are sales tax, per unit tax, value added tax (VAT) or
goods and services tax (GST) and tariff
NOTE: Value added and Percentage tax is the main point of my report in this
second type of taxes
2. A. VALUE ADDED TAX (VAT) – is a type of sales tax which is levied on

consumption on the sale of goods, services or properties, as well as importation,
in the Philippines. To simplify, it means that a certain tax rate (0% to 12%) is
added up to the selling price of a goods or services sold.
2.B. PERCENTAGE TAX – is a business tax that is regulated in the Philippines
which is imposed on individuals or businesses that sell/lease goods and services
with annual sales not exceeding Php 3 Million and is not VAT registered.
WHAT IS THE DIFFERENCE OF VAT AND PERCENTAGE TAX?
-When a business entity is VAT registered, it is subject to 12% sales tax on its
gross sales or receipts. Such sales tax is referred to as VAT or Output Tax. On
the other hand, if a business entity is NON-VAT, it is subject to 3% sales tax on
its gross sales or receipts. Such sales tax is referred to as Percentage Tax.
3. EXCISE TAX (also known as SIN TAXES) – are internal taxes that are levied
on the sale of specific goods and services such as alcohol, fuel and tobacco. It is
indirect tax that is not paid by the customers directly – instead, it is imposed on
the supplier or the producer, who then includes it in the product price.
4. DOCUMENTARY STAMP TAXES – is an excise tax levied on documents,

instruments, loan agreements and papers evidencing the acceptance,
assignment, sale or transfer of an obligation, rights or property incident thereto.
The amount of tax is either fixed or based on the par or face value of the
document or instrument.
NOTE: I also made a video presentation about my report; if you want more
information other than stated above you can click and visit this YouTube link
hhtps://m.youtube.com/watch?
v=TUzHckcnQZw&persist_app=1&app=m&noapp=1

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Name: SOPHIA “GANDA” GABUAT

#10. UNDERSTANDING BUSINESS TAX OBLIGATIONS

-It is a compulsory contribution to state revenue, levied by government on

WHO IS THE TAX PAYER IN THE PHILIPPINES?

WHO REGULATE AND CONTROL THE TAXATION IN PHILIPPINES?

-The Bureau of Internal Revenue (BIR)

WHAT IS THE CONNECTION OF TAX IN ENTREPRENEURSHIP?

-Doing business and earning from it gives an entrepreneur an obligation to pay

-There are 4 main types of tax which is administered by Bureau of Internal

Now, we will discussed those type of taxes mentioned above.

1. INCOME TAX – is a tax imposed on individuals or entities that varies with

2. INDIRECT TAX – are applied on the manufacture or sale of goods and

2. A. VALUE ADDED TAX (VAT) – is a type of sales tax which is levied on

WHAT IS THE DIFFERENCE OF VAT AND PERCENTAGE TAX?

4. DOCUMENTARY STAMP TAXES – is an excise tax levied on documents,

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