Marginal Income Earner - MIE

Self-employed business owners whose annual total gross sales or receipts do not exceed PHP100,000, may be tagged as Marginal Income Earner (MIE)

Marginal Income Earners are small businesses we see around and are usually few blocks away from each other, it may be, but not be limited to small sari-sari stores, small carinderias or turo-turos, drivers/operators of a single unit tricycle or jeepney, vulcanizing shops and others.

Like what I've said in my previous blog Marginal Income Earners are exempt from paying taxes, even the annual BIR registration are free for them, provided they stay small and no plan of expansion; because once they expand the business to generate more sales or revenues most likely they have to change their registrations and pay regular taxes to the government.

Though MIE's exist primarily for Subsistence or Livelihood, they still need to register with the Bureau of Internal Revenue (BIR) with minimal requirements provided for by BIR RMC - No. 7-2014 as follows;

1. Accomplish BIR Form 1901 with only a sworn statement of income and PSA authenticated birth certificate;
2. Registration of books of accounts (e.g., two-column journal or other simplified books for daily expenses and revenues);
   
3. Issuance of registered principal receipts/sales invoices as prescribed under Revenue Memorandum Order No. (RMO) 12-2013; and 
4. Filing annual income tax return (BIR Form 1701) is still required annually.

It must be noted that for Marginal Income Earners, the issuance of invoice or receipts is still required, simple bookkeeping still has to be maintained in the form Books of Accounts, that can be a two-column journal or other simplified record of daily expense and revenues; and filing of Annual Income Tax Returns is mandatory meaning a penalty may be incurred for non-compliance.

The above presentation are self-declaration based on searches applicable to the topic involving the latest issuance from tax regulating body of the Philippines, if there are other revenue regulations or revenue memorandum issued that over rule the above as discussed, such new tax related issuances shall prevail.

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