The Ease of Paying Taxes Act: A step forward for Filipino taxpayers

In the Philippines, paying taxes has never been simple.

- AIRA SEBASTIAN

For years, taxpayers have had to endure long queues, confusing regulations, and harsh penalties—even for minor mistakes. But with the passage of Republic Act 11976, also known as the Ease of Paying Taxes (EOPT) Act, the government is taking a major step toward simplifying the country's tax system.

Signed into law on Jan. 5, 2024, the EOPT Act intends to streamline and modernize the tax payment process. This includes relieving taxpayers of a significant burden by eliminating the 25-percent penalty for submitting taxes at the wrong venue. Taxpayers can now file and pay taxes, either electronically or manually, at any authorized venue without worrying about penalties.

Another significant improvement is the more reasonable treatment of business expenses. Before the EOPT Act, if a taxpayer failed to withhold taxes on a certain payment, the entire expense could be disallowed—a rule that caused undue stress because of how burdensome it was financially, especially for small businesses. Today, under the new law and additional clarification provided by Revenue Memorandum Circular (RMC) 60-2024, those expenses can now be deducted as long as they are properly documented and are deemed necessary for business.