By: Atty. Gregorio B. Austral, CPA
The perks of micro and small taxpayers
The Ease of Paying Taxes Act classifies taxpayers as micro, small, medium, and large, based on sales.
Taxpayers with sales of less than Three million pesos (P3,000,000) are classified as Micro, while those with sales of Three million pesos (P3,000,000) to less than twenty million pesos (P20,000,000) are classified as Small. Medium taxpayers are those with sales of twenty million pesos (P20,000,000) to less than one billion pesos (P1,000,000,000), while Large taxpayers with sales of one billion pesos (P1,000,000,000) and above
The new law gives special concessions to micro and small taxpayers. The following are the perks of being classified as Micro or Small:(a) The Income Tax Return (ITR) required under Section 51 of the NIRC shall consist of a maximum of two (2) pages in paper form or electronic form;
(b) A reduced rate of ten percent (10%) for civil penalties as provided under Section 248 of the NIRC, as amended;
(c) A fifty percent (50%) reduction on the interest rate imposed under Section 249 of the NIRC, as amended;
(d) A reduced fine of Five hundred pesos (P500) as penalty for failure to file certain information returns as provided under Section 250 of the NIRC, as amended; and ASEcHI
(e) A reduced compromise penalty rate of at least fifty percent (50%) for violations of Sections 113, 237, and 238 of the NIRC, as amended.
(Source: Ease of Paying Taxes Act, Republic Act No. 11976, [January 5, 2024])