‘We are breaking’: How tax compliance is weighing on small businesses

A viral open letter exposes how fear, penalties, and unclear rules are pushing Filipino entrepreneurs from growth into survival.

“You may not see it from your desks, but on the ground, we are breaking.”

That line captures the emotional core of an open letter written by a Filipino entrepreneur using the name Small Business Owner PH, addressed to the Bureau of Internal Revenue Philippines. Shared in the Facebook group BIR Tax Updates, Tax Problems & Business Concerns: CPADavao.com, the letter lays out what tax compliance feels like for many small business owners trying to survive in today’s economy.

At one point, the entrepreneur puts it bluntly: “Lately, it feels like you are slowly taking the life out of us.”

The business owner describes waking up before sunrise, going home long after everyone else, and sacrificing health, money, and family time just to keep a business alive. “I am someone who has sacrificed time, money, health, and even family moments just to keep a business alive in this country I love,” the letter reads. Yet instead of relief, the pressure keeps mounting. New requirements appear with little guidance. Documents already submitted are requested again. Penalties arrive without clear explanation. Each notice chips away at the belief that honesty and hard work are enough.

“We are not billion-peso companies with accountants and lawyers at arm’s reach,” the business owner says. “We are mothers, fathers, breadwinners.” The letter underscores how small business owners are often left to navigate complex rules on their own, learning only through penalties rather than instruction. “Do you know how it feels to fear opening a letter from the BIR because you already assume it’s another penalty?” the owner asks.

A system that seemingly punishes mistakes rather than corrects them

That sentiment is echoed repeatedly by other small business owners who shared similar experiences. Many describe fear at the sight of official letters. Some recount spending hours in line only to be told a single form was wrong, requiring another return visit. Others point to repeated submissions of documents already provided or being asked to comply with requirements they say were never clearly explained at the outset. Several admit that penalties and compliance costs pushed them to close shop altogether.

More troubling are the confessions that followed. Some business owners openly say they under-declare income just to stay afloat. Others delay registration or avoid expansion altogether. These are survival strategies shaped by a system that many feel punishes mistakes more aggressively than it corrects them. As one recurring sentiment puts it, small businesses feel regulated through fear rather than guided toward compliance.

The letter makes clear that this is a call for fairness and clarity. “We dream of a BIR that can see the difference between honest small business owners and those who abuse the system,” the letter reads. It calls for a process that “guides instead of terrifies, that mentors instead of punishes,” and that treats small businesses as partners instead of targets.

A plea to distinguish between unintentional errors and deliberate abuse

The appeal is also framed as a warning. Small business owners say they want to pay taxes and contribute to national growth but question whether the system recognizes the difference between unintentional errors and deliberate abuse. Without that distinction, trust erodes.

The consequences of ignoring these pleas are tangible, with growth plans shelved, hiring postponed, and informality increasingly seen as the safer option. As businesses pull back or disappear, communities lose services, workers lose jobs, and the government ultimately loses revenue.

Small businesses are often called the backbone of the economy. The letter asks whether that backbone is being supported or slowly strained under the weight of a system it is struggling to carry.

 

 

An open letter from a Filipino small business owner has struck a nerve among entrepreneurs who say tax compliance now feels more punitive than supportive.

 

 

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