Goodbye, Monthly Percentage Tax!

If you’re registered a self-employed professional, this information may be worth a trip to your RDO. I do not know how to explain what this is exactly, but I’ll try my best, okay? Just please do not expect me to be an expert – this is just a result of collective information from fellow tutors, online research, and my RDO’s officers. Until now, I do not fully understand our tax system, but I am learning the ropes.

You may have heard of the TRAIN law, which aims to have a simpler and fairer tax system. If you want to know more about it, just click this. Before this law, 10% withholding tax was deducted from my salary, but now it’s down to 8%. At first, I thought I didn’t need to do anything for this to take effect. However, since I am a registered self-employed individual, I found out from Tutor Dimpolss that I also need to update my tax status or Certificate of Registration – COR (find out how I registered HERE). I quickly scheduled a visit to my RDO, along with one of my best friends, Tutor NikkiB.

On my birthday, March 20, we brought our original COR and a request letter stating that we’d like our COR to be updated so we can avail of the 8% withholding tax. Sir Alvin of RDO 045 asked us to fill out 2 copies of form 1905Application for Registration Information Update. After receiving our documents, we were told that we can get our updated CORs in the afternoon! We were pleasantly surprised because two of our tutor friends were asked to go back after 2 days or more. We went back at around 4:30 pm, bought 2 documentary stamps (Php 30), and received our updated CORs!

So why did we do it? It’s because we no longer have to pay an extra 3% – the monthly percentage tax (MPT) or 2551M. That meant extra savings for us and even more time to teach instead of waiting in line at banks! All we have to file now are just forms 1701 (ITR) and 1701Q! So if you’re also like us, better find time to go to your RDO – I believe the deadline is this March 31. Otherwise, you will continue paying and filing the MPT on a quarterly basis (form 2551Q will most likely be available in the first week of April).

Just to be clear, though, this is OPTIONAL. If you still want to go on paying your percentage tax, by all means, do so. If not, I recommend that you ask your RDO about this opportunity. Some RDOs may require you to bring your books of accounts or fill out an extra form, etc. Different strokes for different RDOs, so ASK, ASK, ASK! 😉

Thank you to tutors Dimpolss, Manilyn.ROErnest.GRC, and NikkiB for being tax angels. ^^ Many thanks as well to the staff at RDO 045 for being so patient and accommodating, especially Sir Alvin Meru! 🙂

p.s. interested to be an online English teacher? Register now! 😉

2 thoughts on “Goodbye, Monthly Percentage Tax!

  1. Hi fellow Tutor. 🙂 I’ve been following your blog and thank you for posting helpful tips on how to secure a COR for self-employed tutors. I just wanted to ask a few things, just recently, I received an email from RJ Support Team that tutors can now avail of the 5% tax and the 0% tax rate given they meet income limitations for a year. I was just wondering if we still have to pay the monthly tax of 3% even though income tax has already been reduced to 5% and 0%?


    • According to my RDO, as long as we updated our COR and we didn’t pay any monthly percentage tax this year, we only have to file the 1701 and 1701Q. To be safe, I encourage you to ask your RDO.


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