Towards a simplified and cost-efficient tax administration: The Game-Changing Ease of Paying Taxes (EOPT) Act.
On 5 January 2024, President Ferdinand Marcos, Jr. signed into law Republic Act No. 11976, otherwise known as the Ease of Paying Taxes (EOPT) Act, which aims to “modernize tax administration and improve its efficiency and effectiveness by providing mechanisms that encourage proper and easy compliance at the least cost and resources possible.”
This new measure by the government provides an efficient and least possible cost in tax compliance of companies. Among these are as follows:
- • Classification of taxpayers into micro, small, medium, and large.
- • Removal of the requirement to deduct the withholding tax for expenses. Taxpayers should no longer worry about this in the assessment under the item “disallowed due to non-withholding.” However, the expenses should still be supported by receipts to be deductible.
- • Filing of return and payment of taxes due therefrom anywhere in the Philippines;
- • Removal of the requirement of paying the annual registration fee amounting to Php500.00 for new and existing businesses (Certificates of registration bearing BIR Form 0605 remain valid even if not replaced);
- • Withholding of taxes when it becomes payable;
- • Imposition of Value-Added Tax of 12% on sale of services or lease properties based on gross sales rather than gross receipts.
- • Removal of business style in both invoicing and registration requirements;
- • The threshold for VAT Exempt transactions, which is currently at Php3,000,000.00, is now subject to periodic adjustment based on the Consumer Price Index to be released by the Philippine Statistics Authority;
- • Lower penalties for micro and small enterprises;
We've got you covered. For a detailed comparison of the old and new law, you may refer to the following link: https://www.morfecenetacpas.com/write-up-ease-of-paying-taxes-act-of-2024.pdf
Justice Oliver Wendell Holmes of the United States Supreme Court once said, “Taxes are what we pay for civilized society.” The enactment of the Ease of Paying Taxes Act will help all taxpayers ease the burden of complying with tax laws at the least cost possible and prevent them from incurring any penalties. This is a game-changer for everyone as the new law will also provide taxpayers ample time to focus on building and expanding their businesses for more opportunities. For the government, this will pave the way for the least expensive and efficient tax administration and monitoring.
To help you navigate the provisions of the Ease of Paying Taxes Act and how it will affect your business, you may get in touch with us via advisors@morfecenetacpas.com or call us at 8 (02) 703-3560 to guide you through the intricacies of this new legislation.
This article was prepared by Morfe, Ceneta & Co., and CPAs for general information only and should not be used as a replacement for expert advice.