UIT uploaded it 2023: how much does it cost and how does it affect our economy?

At the end of last year in Ministry of Economics has approved a unit tax increase (UIT) from S$4,600 to S$4,950 for 2023, more than S$300, but why is this important?

ITU This is a reference value that is used to calculate taxes, fines, and other tax, labor, and litigation matters.

Why is ITU growing?

Pacífico Business School financial expert Jorge Carrillo Acosta elaborates that this amount of S$4,950 will apply throughout 2023 and increase due to this year’s price index.

“The UTII value is set by the Ministry of Economy and Finance (MEF) and is valid throughout the calendar year (from January 1 to December 31). It is calculated based on a number of macroeconomic elements, mainly inflationso it tends to grow every year,” he says.

It is worth noting that this increase is S/350 more than this year, when ITU raised S/200. In previous years, from 2016 to 2021, the increase was only S/100.

How does this increase in ITU affect us?

As mentioned above, a higher UIT affects the personal and family finances of Peruvians.

In the case of employees, this means that they will pay less. Income tax on their salaries, so they will have more liquidity.

For example, if your gross salary is 3,000 somoni, you can save about 196 seiju per year in income tax.

In addition, the monthly gross salary limit has been raised to avoid paying Income taxwhich will be SGD 2,300 in 2022 and SGD 2,475 by 2023.

As regards self-employed workers issuing pay stubs, the maximum monthly amount issued in order to avoid paying taxes has been increased from 3,354 to 3,609 somoni.

Likewise, the personal spending limit on a refund request Income tax for work in the fourth and fifth categories increases from 13,800 s/m to 14,850 s/m, since this is 3 UIT.

Other consequences that will be observed are that a larger amount of subsidy for the Mivivienda loan will be received, less property tax and alcabala will be paid, the cost of administrative fines will increase, and the cost of lawsuits will increase, as well as other procedures before the condition.

Increasing the value of the UIT increases the sales limit so that businesses can be considered micro or small companies (mypes).

If we take into account that the sales limit that is considered a micro-enterprise is 150 UIT, this value rises from SGD 690,000 to SGD 742,500.

Similarly, for a business to be considered in the small business category, it must have a maximum income cap of UIT 1,700, which is currently increasing from S$7,820,000 to S$8,415,000.

Under the MYPE tax regime, effective since 2017, the income tax rate is 10% for the first 15 UITs and 29.5% on top of that amount.

“So with an increase in UIT, companies operating in this mode will save about S/1024 in annual taxes,” says Carrillo.

Carrillo points out that the negative side of this ITU increase implies a reduction collection of taxesConsequently, the state will have fewer resources to carry out the work, but this will not be a significant reduction.

These are other effects associated with the increase ITU: