THE 2024 STATE OF ONLINE TAXATION: Amid financial insecurity, Millennials and Gen Z taxpayers drive economic growth – with Female Millennials taking the lead

 

Millennials are still Dominating, But Gen Zs are catching up

Millennials remain the backbone of the online taxpayer demographic, contributing nearly 75% of income filings in 2024. This generation, born between 1981 and 1996, continues to be a vital force in driving economic activity and generating tax revenue in the Philippines.

However, Gen Z (born after 1996) online taxpayers are quickly increasing, with their share of income filings rising from 9% in 2023 to 12.7% in 2024. This generation's growing economic influence is indicative of their early entry into the workforce and their preference for digital solutions in managing their financial responsibilities. Gen Z’s growing participation showcases their adaptability and innovative approach to economic engagement.

Female Millennials alone account for the highest percentage across all categories at 42.9%, followed by Female Gen Z at 10.6%. This indicates a strong presence of female representation in these younger generations within the socioeconomic spectrum.

Informal Employment Rises, as Low Income Earners Experience Downgrade in Socioeconomic Status

Despite facing economic challenges, the use of online tax payments has seen a significant rise. Tax collections through Taxumo have grown by approximately 58.45% year-on-year, reflecting a broader trend towards digitalization and ease of compliance. The Bureau of Internal Revenue (BIR) reported an 11% increase in tax collections in April, surpassing their target by Php35.114 billion.

However, informal employment remains a significant issue, with IBON Foundation estimating that 41.6% of the workforce, or 20.4 million people, are engaged in informal work. This includes domestic workers, self-employed individuals, and unpaid family workers. The prevalence of informal employment underscores the need for more robust economic policies and support systems.

The majority of Poor taxpayers who were Poor last year remained poor (65%.) 41% of individuals in the Low Income category have experienced a decline in their socioeconomic status coming from a higher earning bracket, while 40% have seen an improvement in their socioeconomic status.

None of the individuals in the Rich category have experienced a decline in their economic status, but 44% are newly Rich – finally breaking out of their High Income status from the previous year.

Service Providers are the Top Online Taxpayers

Businesses focused on services, such as events management, travel agencies, and social media agencies, lead the way in online tax filings. The IT & Tech sector also has a strong presence, highlighting a growing technology-driven economy.

For a deeper dive into the insights and recommendations of the 2024 State of Online Taxation report, visit txmo.co/SOOT2024

About Taxumo

Taxumo is the pioneering, multi-awarded online tax filing and payment platform in the Philippines—the easiest way for Filipino small business owners, self-employed professionals, and freelancers to prepare, file, and pay their taxes, as well as register their businesses. With Taxumo, all you need to do is put in your income and expenses, and Taxumo does the rest (from computing your tax dues, to filling up BIR tax forms, and paying taxes online).

This Press Release has also been published on VRITIMES