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Just How Hard Can They Make it to Pay Taxes?

Jul 14 | By 85andbelow | Views: 407 | Comments: 24
If you ever want to understand why there are so few jobs in the Philippines and why it has never become the exporting behemoth that the other SE Asian have just try to set up an SSS account and file the reports.

SSS is Social Security System, their social insurance program paid for by employers and to a lesser degree by employee deductions.   You will spend several days gathering the requirements to set up the account including proving that you have other government paperwork or permits filed, are paying BIR taxes and such.   At some point you will be directed to their online filing system and payment posting system and if you thought things were screwed up in the Philippines you are about to get your eyes opened once again.

Filing consists of filling out a form either online or using their "R3 generator", a software package that you download and install on your computer to generate the form, fill it out, and print it.  Problem is that the software was built around Windows XP, and other Windows versions that date back to around 2000 or so.  Even a Windows 7 machine will usually not be able to open the software and run it.  No problem, right?  There is the online system.

Which does work with Windows 10...or at least parts of the website will work but not with Firefox, Chrome, or the other popular browsers.  And featured prominently on their website is a warning that the system only works (they actually aren't smart enough to say that specifically) with Internet Explorer 11, which was last updated in 2013 according to their website.  Yep, they base their entire website around an obsolete browser that has had four years of missing virus patches or regular maintenance.

No problem, just click on their link and download the older version of IE.  Except you can't on a Windows 10 machine 64 bit machine and if you try it on most Windows 7 machines that are actually still operating you will find that it is impossible to download the older version unless you uninstall the more current IE on your machine.  So you are screwed if you need full function, actually if you expect it to actually file the reports and work as intended other than viewing some of the pages and using some of the features.

Then once you get into the online system the fun begins.   There is no real list of filed reports so you have to do an "inquiry", if you know the exact date that the old report was filed.  A list of payments that are posted?  In your dreams fool!  A way to update or edit a filed report?  Uh uh... If someone fills out the report wrong or pays a tiny amount too much or too little you are SOL, it creates a shit storm of problems that they apparently can't edit themselves so to get past it you are required to write a letter explaining why you are "out of bracket".  Not that doing so balances the books or fixes anything, you just are going to write the letter because they told you to do so.

Then every year you have a staff member go down to pay the monthly taxes and find out you can't pay the taxes because the staffer's ID card, the required SSS ID card, has expired.  No, this isn't what we in the U.S. would call a social security card, it is a special ID card for whoever goes down to pay the damned tax bill each month.  You send a request letter, two forms of your ID and two forms of ID for the staffer and they make the staffer a new ID card that has to be with them before they file the tax report or pay the monthly tax bill or even ask for help.

Now who in the hell is going to sneak into SSS and pay someone else's taxes?   You have to assume at some point that some Filipino figured out a way to game their system, maybe turning in fake reports to drive up their benefits, who the hell knows.

And yeah, even though you can file the reports online you still have to pay in person at the SSS office or at a bank and then go back and enter the receipts transaction number and exact date and hope it finds the payment.   If you don't post the payments but have actually paid the monthly taxes on time you will still be fined.  And you are still turning in a paper copy of the monthly report, like so many online solutions they have recently implemented in the Philippines trying to influence their business ranking the system cannot communicate with the local SSS office so you file the paper copy so they can manually enter the names, SSS numbers, and other details into the worker's benefits.   What could go wrong, right?
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85andbelow
Jul 16
DD, we are export only so are supposed to be exempt from paying the VAT on materials and supplies but after two years we are still waiting on approval. Actually that consists of staff going down to BIR and being told that they will call us in when we have enough qualifying purchases which is 20K, which we can spend in a day when we are in full production. This kind of treatment isn't unusual, damn the law, they will do as they please. Then while we are exempt from duties and VAT on imports it will cost around 10K for the broker to bring in a small shipment like a pallet of specialty materials while bringing in something informally might cost one third of that in VAT and maybe 400 for the broker at the airport to fill out the import papers. You pretty much need to consolidate and fill a container in order to bring things in.DD, we are export only so are supposed to be exempt from paying the VAT on materials and supplies but after two years we are still waiting on approval. Actually that consists of staff going down to BI...See more
GypsyX
Jul 16
& even then- your container might get opened & itemised, if anything is not listed on manifest, big problems, if anything is of an unsure value, import duty is based on percentage of local price. If you prepay exactly everything according to the rules, it is almost never worth importing anything. I've had piles of ideas for import I'm sure are seriously profitable, but gambling a container cost doubling or tripling on arrival isn't something I'm going to take on.& even then- your container might get opened & itemised, if anything is not listed on manifest, big problems, if anything is of an unsure value, import duty is based on percentage of local pri...See more
GypsyX
Jul 16
On Government holding back the country- omg- really unfathomable to anyone not used to the most backwards despotic dumps. Imagine being a naïve tourist who saw a few nice pics & decided to travel by road from north to south in a few weeks- how much sheer bullshit would they be subjected to? Should they go further south than Gensan or south west of Davao- what chance of early death? When leaving most countries, airports are predictable, boring, but somewhat effecient. Flying out of NAIA- faaaark- really????? Is there another airport in the world where if you ain't in the building 4 fucking hours before departure, you have likely missed your flight? 2017???On Government holding back the country- omg- really unfathomable to anyone not used to the most backwards despotic dumps. Imagine being a naïve tourist who saw a few nice pics & decided to travel ...See more
forawhilesir
Jul 16
85,Gypsy: I figured out within a couple of weeks that the business ideas I originally had would never fly here, simply because it's actual government policy to squeeze out every last drop of cash from profitable businesses until they're forced to shut down. The rules are deliberately set up to allow the BIR etc to take whatever they want with complete impunity. The only way to scrape by here is to work in the 'grey economy' - ie., do what 99/100 Filipinos do. If you attempt to work with the system, you'll be fleeced of every last cent, then shot down in flames.

Mike: I don't think there's anything Japan wants from the Philippines except cheap pussy. However you are completely mistaken about Filipina prostitutes. There is no prostitution here. Filipinos are all God-fearing Catholics, so it's impossible for them to be prostitutes. And if there are any, it's because America. Go back to your own country!
85,Gypsy: I figured out within a couple of weeks that the business ideas I originally had would never fly here, simply because it's actual government policy to squeeze out every last drop of cash from...See more
Tudurte
Jul 16
@forawhile, yeah we remember the Jennifer Laude case. S/He was a good Catholic, living a G-d fearing life and always at Church on a Sunday. Guess the Flips have never read the Old Testament, actually they probably have never read the Bible at all except for the verse "go fourth and multiply".
I am also with you @forawhile on imports. I have had a heap of grand ideas but there is too much risk importing as you never know how many bribes you will have to pay, so the patented fireproof plywood, and a host of other amazing first world inventions, can stay here in Oz and the slums can burn down like they always do.
@forawhile, yeah we remember the Jennifer Laude case. S/He was a good Catholic, living a G-d fearing life and always at Church on a Sunday. Guess the Flips have never read the Old Testament, actually ...See more
GypsyX
Jul 16
I started one of 3 businesses there I thought up, through family, operating under the radar via landlord BIR umbrella. Drongo family didn't keep records to prove franchise ability- without which after two years we had a 32,000 peso per month one person retail operation,(fashion) no imports, all stock sourced landed in Manila. This really pissed me off, as franchising is much more viable than any other real world business in the Philippines, IMHO. I definitely mean franchise development, not buying in, selling. (The strong microbusiness franchise market directly relates to remitters keen to reduce family dependency. A proven $100 weekly profitability is a big deal in provincial Philippines- ) Another business Idea i gave to a Barangay Captain, by putting in an application for a land grant & not following through- he's run it successfully for 7 years, multi media printing, if you get my drift. His Barangay just happens to be at a prime spot for my best idea there, which without giving it away is effectively a pop up business, completely portable. For flying just under the radar- portability is priceless. One of the reasons Duterte wants rid of the Barangay system is the microbusiness licensing which goes on virtually everywhere, largely avoiding tax making it as far as the BIR. Besides, we all know hpw often we get handed an official BIR receipt right?I started one of 3 businesses there I thought up, through family, operating under the radar via landlord BIR umbrella. Drongo family didn't keep records to prove franchise ability- without which after...See more
85andbelow
Jul 17
GypsyX, the PEZA Zones are fairly safe for importing because they bleed you a hundred other ways. I've had neighboring shops tell of shipments coming in during the holidays and getting slammed with 60K "storage" bills at Customs which is open 24/7/365 so that usually happens to new importers not paying attention. But importing into the country itself outside of a customs free port zone? Even I wouldn't want to do that.GypsyX, the PEZA Zones are fairly safe for importing because they bleed you a hundred other ways. I've had neighboring shops tell of shipments coming in during the holidays and getting slammed with 60...See more
Mike
Jul 17
85,
You and the rest will love this one. A few years back I got an email from a Paul who was asking my advice with a problem he was having with philippine customs. Now Paul back in the states was a trained and experienced rescue worker, earthquakes and such as well as a paramedic and retired here to help during disasters and teach.

Paul just happened to have this Jeep Cherokee that he packed his personal belongings in and had shipped here. But before shipping he contacted philippine customs to find out about any taxes due when his Cherokee arrived. He gave them all the info and they told him the tax on it so he ships it. Paul arrived before his Cherokee and went into customs with paperwork on the jeep and paid due import taxes before his Jeep arrived.

So the day the Jeep arrives Paul goes down to pick it up and customs tell him he needs to pay more but I forgot how much and his jeep will be released. So Paul wanting his jeep and personal items went and got more cash and paid customs only to hear again that the "fee" had increased while he was gone. So Paul went and got more money and was told the same thing,EXCEPT this time they raised the "fee" so high Paul could not pay it.

That's when Paul found my Yahoo comment about what the philippines was really like. He said that customs told him that if he did not pay the "additional fees" his jeep would be put up for auction and he could bid on it there. Paul told me it would be cheaper to do it that way instead of them increasing the "fees" each time he walked in to pay. I pretty much told Paul he lost his jeep but try bidding on it. So auction day comes up and Paul sees his jeep coming up for bid. Then customs pulls it out of the sale. This happened each time Paul went to bid on his jeep. They would not even let Paul get his clothes out of it. So if you see a customs official driving around in a Jeep Cherokee you now know how he stole, i mean "acquired" it. It also goes without saying that Paul last I heard never got his jeep and was not fond of filipinos or the country.

Paul said in the back of his jeep he had clothes and emergency equipment he used for rescuing people trapped in buildings after an earthquake and other tools. Safe to say all his stuff was gone LONG before his jeep hit the auction block.
85,
You and the rest will love this one. A few years back I got an email from a Paul who was asking my advice with a problem he was having with philippine customs. Now Paul back in the states ...See more
DingDong
Jul 17
I never moved a vehicle here, as I 'Know the Score!' - However, I did manage to move here from Dubai with everything packed into 'Balikbayan Boxes' - Even a Fridge/Freezer full of Gin!
85andbelow
Jul 18
Customs, AKA "crocodiles" tend to leave PEZA companies alone as the PEZA organizations are usually well connected and trying to attract new exporters. At the zone Customs dock they will attempt to extort small "fees" on occasion from native staffers who might initially be intimidated enough to pay. After the second occurrence I laid the law down and said no more. Staff said the next time the officer grumbled that no one else was not paying the fee but stopped the extortion. They have a built in graft program though, parking fees. Yeah, there is a construction company that actually "owns" or leases the parking lot so you have to pay 150 pesos "parking fee" when you pull into the lot. No fee receipt, no service. You can bet that someone's brother in law owns that construction company.Customs, AKA "crocodiles" tend to leave PEZA companies alone as the PEZA organizations are usually well connected and trying to attract new exporters. At the zone Customs dock they will atte...See more
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