Wednesday, May 29, 2024

Report: Upper middle, high-income online taxpayers growing

The latest online taxation report from online tax filing and payment platform Taxumo has revealed important movements of online tax payments in the Philippines during the first year of the Marcos Jr. administration.

The report noted that the Bureau of Internal Revenue’s push to ensure tax compliance in the country seems to be paying off with the agency reporting that they have exceeded their April tax collection targets by over 11%, collecting P336.020 billion last month – P35.114 billion higher than its P300.9 billion goal for this period.

The report said socioeconomic mobility of online taxpayers may be a sign that businesses are doing better in the so-called post-pandemic new normal with the share of poor in the online taxpayers population going down considerably from 32.7% in 2022 versus 26.2% in 2023.

Meanwhile, the upper middle class and high-income online taxpayers grew by 3.8% and 2.2%, respectively.

“To note though, there is insignificant to no movement with Low Income, Low Middle Class, and Middle Class online taxpayers. Rich online taxpayers did not grow as well,” the report said.

Same as last year, Millennial online taxpayers still are the dominant segment, according to the study.

However, taking the second place this year is Generation Z, a place which was occupied by Generation X in 2022. Boomers meanwhile are a tiny 1.5% of the online taxpayer population, the report observed.

In terms of gender identity, male online taxpayers have been dominating the rest in the total amount of online tax filings, the report said.

“During this report, we saw that 14.2% of online Filipino taxpayers come from Quezon City. At a distant second is the commercial district of the country, Makati. It is closely tailed by cities from the south of Greater Manila, in order of highest to lowest: Cavite, Laguna, Cebu, Paranaque, Las Pinas, and Muntinlupa,” the report said.

The online taxation report also observed that more than half of the filings made by online Filipino taxpayers come from service-oriented businesses.

Some of the businesses that fell under this classification are: events management, travel agencies, supplies, and social media agencies.

Meanwhile, industries like IT and tech (software and computer related services) come at a distant second. Medical and accounting professionals account for 5.7% and 7.1% of the total share, respectively.

Individual professional services like freelancing, consultancy, and virtual assistance are also visible this year, as the trend of home-based, remote-work setups continue to rise.

EJ Arboleda, CEO of Taxumo, said: “While we remain cautiously optimistic about the continued growth of the country’s economy, we’ve observed in this latest State of Online Taxation report that much needs to be done to make sure that our economic growth is inclusive.

“Already we’re seeing that women are lagging behind men online taxpayers, while cities outside NCR still are way behind. We’re keen to support our government’s efforts to make sure that doing business is made easier, not just for those who have historically had privilege in society, but for all professionals and business owners.”

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