The Bureau of Internal Revenue (BIR) has announced significant changes in its revenue regulations affecting micro and small taxpayers, as outlined in Revenue Regulations No. 6-2024. These changes are aimed at easing the financial burden on smaller taxpayers and promoting compliance.
Classification of Taxpayers:
- Micro Taxpayer: Businesses with gross sales of less than PHP 3,000,000 for a taxable year.
- Small Taxpayer: Businesses with gross sales ranging from PHP 3,000,000 to less than PHP 20,000,000 for a taxable year.
Key Updates:
- Reduced Interest Rate:
- The interest rate on unpaid taxes has been lowered to 6%, which is half the previous rate specified in Section 249 of the Tax Code. Future adjustments to this rate will be determined by the Commissioner of Internal Revenue.
- Penalties for Non-Compliance:
- Civil penalties for failure to file returns, pay the tax due, or address deficiency taxes are now capped at 10% of the amount due.
- For cases involving willful neglect or fraudulent filings, the penalty is 50%. Specific conditions such as “substantial under-declaration” or “substantial overstatement of deductions” are defined as exceeding 30% of the reported amounts.
- Failure to File Information Return:
- A penalty of PHP 500.00 to PHP 12,500.00 per year will be imposed for the failure to file information returns.
- Criminal Violations:
- Non-fraudulent criminal violations of certain Tax Code sections will incur a reduced compromise penalty, set at 50% of the standard rate. This can be adjusted higher or lower with the Commissioner’s approval.
Implementation:
- These new regulations will take effect 15 days after publication in the Official Gazette or on the BIR official website, whichever comes first.
For more detailed information and guidance, taxpayers are encouraged to visit the BIR website or consult with a tax professional.
Source: BIR RR No. 6-2024 (March 22, 2024)
