The business and legal implications of taxing telecommuter income

• Main Author: Robles, Joanna Marie G.
• Format: text
• Language: English
• Published: Animo Repository 2012
• Subjects: Telecommuting—Taxation—Philippines; Telecommuting—Law and legislation—Philippines; Labor and Employment Law
• Online Access: https://animorepository.dlsu.edu.ph/etd_masteral/6836
• Institution: De La Salle University

Telecommuting, or the act of working in another location aside from the central work place is not a new concept to Filipinos. Usually, the telecommuter works from home and this has been made possible with various telecommunications technologies, such as a telephone, fax, Internet and web conferencing capabilities. These solution suites are delivered over the Internet via the software-as-a-service or cloud based model of delivery. As this segment of the informal sector continues to grow, the question then revolves around determining the business and legal implications of the informal sector. The author has uncovered through cost-benefit analysis that this segment of the informal sector continues to grow because of the benefit to the individual. In fact, on average, a telecommuting call center agent earns a minimum of Twenty Eight Thousand Pesos monthly. Through surveys and interviews with the different stakeholders of the telecommuting segment of the informal sector, the author has uncovered untapped potential revenue for the government in the form of business and income tax. Doing a second cost-benefit analysis to determine the feasibility of collecting the tax due to the government, this research has determined that on a yearly basis, the BIR forgoes on collecting some half a million worth of taxes from 100 telecommuters. This study presents a solution to the problem of monitoring this sector as well as formalizing it through the imposition of a fixed tax and incentives to bring these individuals within the coverage of the system. It also paves the way for further studies to be conducted to formalize the informal sector.