Tax Challenges for Self-Employed

The conditions self-employed individuals face remain significantly distinct from those of traditional employees. There is still considerable progress to be made in creating policies that genuinely bolster self-employment and small enterprises.

I advocate for the establishment of a tax and contribution system that doesn’t burden self-employed individuals before they even start for two compelling reasons:

Many individuals resort to off-the-books or underground economies not out of ill intent but out of necessity. This informal economy plays a vital role in supporting a fundamental component of our nation’s economic engine: microenterprises. The brutal change of habits and even the lifestyle that it supposes, you have another obstacle to saving when you look at your head. It is unnatural because wealth is generated only from what overflows, not what is scarce. However, we must remember that a good part of what you earn, fortunately, goes to services we all benefit from.

Furthermore, the drastic shift in lifestyle and habits imposed by these financial obligations is an additional barrier to savings. Taxing them heavily from the start hinders their ability to cover immediate financial burdens, impacting their ability to invest and grow. Wealth is created from abundance, not scarcity, but we must remember that our earnings also contribute to essential services. However, we must not forget that most of our earnings contribute to services that benefit us all.

While I’ve addressed these concerns, it’s important to recognize that although the system’s flaws exist, it shouldn’t be the sole focus of your thoughts.

Embrace the Essentials

You determine your focus, and your energy and determination lead to results. Suppose you spend too much time dwelling on the fairness or unfairness of the current system when starting a business. In that case, you’re expending energy that could be better directed toward acquiring more customers.

Shift your focus to self–improvement. As you enhance your skills, you’ll achieve better results, translating into increased income, enabling you to meet your tax obligations and lead your desired life.

I’m not suggesting that you disregard your business’s legal and fiscal aspects. In this regard, it’s advisable to consult with a professional who stays updated on legal changes and provides guidance tailored to your specific situation. Employing an advisor saves you time on paperwork and offers peace of mind, knowing that you won’t make costly mistakes.

Legitimacy Equals Reputation and Success

Operating within the bounds of legality enhances your reputation and brand. This reputation is your assurance of conducting sound business and attracting serious partners and clients. You’ll find more opportunities to collaborate with reliable individuals. Everyone will want to work with you, and the chances of working with worthwhile people will increase. 

If your income is currently modest, it’s advisable to consider registering with the tax authorities so you can begin issuing invoices. It is a better approach than operating in the shadows, as legality can provide opportunities. You should establish and grow your business in step with your income level.

If you’re uncertain whether to register due to limited income, a temporary solution is to register with the treasury to issue your initial invoices. It is far more beneficial than remaining hidden, as legality often unlocks doors. The key is not to set up a company with expenses beyond your means but to progress gradually. Your tax status should align with your income level—each step at the right time. Hopefully, governments may introduce progressive tax schemes in the future, but in the meantime, you should keep moving forward.

Pain Fuels Progress

Pain serves as a powerful motivator. The discomfort of financial scarcity compels you to move beyond excuses and strive for increased earnings. When we’re comfortable, we often settle for less.

A substantial portion of your income may be allocated to business expenses and tax obligations. Business costs are essential for nurturing and refining the machinery that generates income. Tax contributions are indispensable for delivering the services we all rely on and are obligated to support.

Conclusion

In conclusion, the disparity between the self–employed and traditional employees persists, underscoring the need for policies advocating self-employment and small businesses. I advocate for a tax system that alleviates the initial burden on the self-employed, understanding that many turn to underground economies out of necessity, supporting the vital microenterprise sector.

While the challenges are acknowledged, it’s crucial not to let them consume our focus. Redirecting our energy toward self–improvement and skill development is the path to achieving better results, increased income, and the ability to meet tax obligations, enabling us to lead the life we aspire to.

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