They said that tax is like a form of legalized robbery. Businessmen abhor paying taxes because they see nothing out of what they scrape from their hard work. Everything goes out of the blue like a smoke gone with the wind.
We dislike taxes the way we fear death. But weather we like it or not, according to some advocates, tax is as inevitable as death. Tax on the other side of the same coin is the lifeblood of our physical society. It is in taxes that we build bridges, schools, highways, hospitals and the likes. But it is also in taxes that the social raptors get into our nerves and thus build walls against them instead of bridges.
Tax evasion is a criminal act, that is to clarify things. If the government is dexterous in formulating laws in labs to siphon more taxes, then businessmen are as much cunning in scheming ways to evade tax hits like the famous bullet-timing of The Matrix by Neo.
Nevertheless, there are smart ways of paying taxes – that is to say minimizing the grasp of its fangs on your hard-won earnings or business profit.
TAX SYSTEM IS AS COMPLICATED AS LIFE ITSELF
Let’s accept it that taxation is a complicated piece of systematized suction machine at the expense of our government – not the paying itself. Paying tax is as easy as eating an apple pie. What makes it complicated anyway? It’s just a tango of mathematical operations such as plus and minus.
The complications of taxation add up to the complexity of starting your own business at least here in the Philippines. Further, taxes are a capital burdening leeches sometimes that frustrates businessmen. That is why businessmen held high their brows in quoting their CPA about tax deductions and exemptions. This leaves sour grins between entrepreneurs and the government.
TAX FIRST THINGS FIRST
Businessmen, employee, self-employed or any body that is concerned of earning money must at least know the basic taxation system in our country. Knowing what to pay for is basic as where to spend your last penny – because how badly do you need to minimize your tax payment?
Some businesses are heavily taxed because of the very simple ignorance of not knowing tax exemptions. Collecting sector won’t mind telling you what exemptions are if you won’t mind yourself asking. It’s for their own advantage anyway.
Businesses are first of all advised to hire accounting staff or consultant to check on this matter.
SAVING FACTORS: EXEMPTIONS
Again exemptions are exemptions as long as you dared asked for it. It is never obligatorily imposed on you by the government, if it is then no business will be taxed in a daredevil amount. Unless you asked, you’ll never get it. I guess this is where the government plays a little bit safe into their canopy.
First rule it to find as much medium as you can to minimize tax obligations. You can haggle on your proper use of deductions, the lowering of declared gross income and the proper use of tax credits.
KNOW WHICH IS WHICH
Know what sector of your business is to answer the inquisition of taxation. The basic figure is that administrative sector of the business may differ in taxation from the second which is the manufacturing. The manufacturing requires heavy materials, more labors, electricity and therefore more expenses. Administratives are the staff, accounting, marketing and clerical of the company.
If you happened to buy to one of the biggest pharmaceutical stores in the country, you are perhaps asked for a discount card for points. In the same fashion the Finance Department would issue the what we call Tax Certificate as (meager) tax shield. This will lower your tax liability.
GOOD BOOK KEEPING
While paying tax is a way, keeping a good tracking of all your tax outputs is another thing. It would be unwise to go into big business and answer the beaconing of taxes without a good accountant to paddle your canoe.
Paying taxes on time may actually lower your tax obligation if you happened to heed to its scruples.
Tax has never been burdensome than paying for what you must have saved by knowing its basic ground operations. And it may never be as annoying as your neighbors shrieking maids or as frightening as death if you know the rule of the game.