RR 6-2024: Imposition of Reduced Interest and Penalty for Micro Small Taxpayers

This article is about Revenue Regulation No. 6-2024 or RR 6-2024 – Implementing Imposition of Reduced Interest and Penalty Rates for Micro and Small Taxpayers. This revenue regulation also implements the changes or amendments made by EOPT.

If you don’t know your classification as taxpayer (micro, small, medium or large taxpayer), read our article RR 8-2024: Implementing on Classification of Taxpayers.

Because of this newly added tax law, taxpayers belonging in Micro and Small classification will now benefit on a lowered imposition of penalties compared to the previously implemented penalties prior to the effective date of EOPT and RR 6-2024.

In this article, I will share the summarized changes implemented by RR 6-2024:

Imposition of Reduced Civil Penalties according to RR 6-2024

The EOPT Law and RR 6-2024 implements imposition of reduced or lowered civil penalties for Micro and Small Taxpayers such as the following:

Civil penalty of ten percent (10%) based on the amount of tax due in the following cases:

• Failure to file the tax return and pay corresponding tax due within the deadline date. However, there will be no penalty imposed on amendment of tax return if the return was filed and paid before the deadline date.
• Failure to pay the amount tax due, in full or partial amount, of a filed tax return within the deadline date, including those who filed the tax return even if it’s not required to be filed.
• Failure to pay the deficiency tax within deadline date of payment stated in the notice of assessment.

Sample Computation of Civil Penalty:

Tax Due                                        P10,000
x Rate                                                10%
Civil Penalty                                P 1,000

Penalty of fifty percent (50%) based on the amount of tax due, or of deficiency tax, will apply in the following cases:

• Willful neglect to file a tax return within the deadline.
• False or fraudulent filing of return.
• Prima facie evidence of a false or fraudulent return in cases where there’s a substantial under declaration of sales or income and/or substantial overstatement of deductions. For it to be considered substantial, the basis will be thirty percent (30%) of the actual sales or deductions.

There’s no changes or reduction made on this rate. The penalty is still fifty percent (50%).

Imposition of Reduced Interest according to RR 6-2024

The EOPT Law and RR 6-2024 implements imposition of reduced or lowered interest rate imposed on unpaid tax due by fifty percent (50%) of the mandated interest rate stated.

Currently the interest rate imposed is twelve percent (12%). As such, the reduced interest rate for Micro and Small Taxpayers will be six percent (6%).

Sample Computation:

Tax Due                                          P10,000
x Rate                                                   6%
Interest                                         P     600

Imposition of Reduced Penalty for Failure to File Certain Information Return

The EOPT Law and RR 6-2024 implements imposition of reduced or lowered penalty of five hundred pesos (P500) on failure of Micro and Small Taxpayers to provide or submit on or before deadline date of the following:

• Failure to file an information return
• Failure to file or submit statement or list
• Failure to keep any record
• Failure to supply any information as required

The penalty will be imposed and collected on every applicable violation committed by the micro and small taxpayer. However, the aggregate amount of penalty for all such failures during a calendar year shall not exceed twelve thousand five hundred pesos (P12,500).

The five hundred pesos (P500) is a fifty percent (50%) reduction from the current minimum penalty of one thousand pesos (P1,000).

Imposition of Reduced Compromise Penalty

The EOPT Law and RR 6-2024 implements imposition of reduced or lowered compromise penalty for Micro and Small Taxpayers. It reduced or lowered compromised penalty by fifty percent (50%) of the applicable rate or amount of compromise under Revenue Memorandum Order (RMO) No 7-2015 Annex A and its subsequent amendments.

I hope this article has helped you learn and be updated on the new classifications of taxpayers and the amendments on penalties imposed to Micro and Small taxpayers. If you have any questions or clarifications, you may leave a comment below. And if you like the article and find it useful, please share the article.

RR 6-2024 PDF

If you want to read the full text of Revenue Regulation RR 6-2024, you can download the pdf here (RR 6-2024 pdf).