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Percentage Tax Reverts Back to 3% Effective July 1, 2023

The percentage tax in the Philippines has been reverted back to 3% effective July 1, 2023. Republic Act No. 11534, also known as the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act, was amended by Republic Act No. 11590. The CREATE Act originally lowered the percentage tax rate from 3% to 1% for the period from July 1, 2020, to June 30, 2023.

RMC No. 69-2023 PT revert to 3%
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The amendment to the CREATE Act was made in order to generate more revenue for the government. The 3% percentage tax rate is expected to generate an additional P15 billion in revenue for the government.


This change will affect businesses that are subject to the percentage tax. These businesses will now need to pay 3% of their gross sales or receipts, instead of 1%. This could mean an increase in their tax liability.


Taxpayers who are subject to the percentage tax are reminded to comply with their tax obligations. They should file their quarterly percentage tax returns and pay their taxes on time. Failure to do so may result in penalties.

Here are some of the businesses that are subject to the percentage tax:

  • Non-VAT registered persons who sell goods, properties, or services.

  • Domestic carriers and keepers of garages.

  • International air/shipping carriers doing business in the Philippines.

  • Franchise grantees:

  • Gas and water utilities.

  • Radio and television broadcasting companies.

  • Overseas dispatch, message or conversation originating from the Philippines.

  • Banks and non-bank financial intermediaries performing quasi-banking functions.

If you are unsure whether your business is subject to the percentage tax, you should consult with a tax professional.


Here are some tips for businesses that are subject to the percentage tax:

  • Start planning now. Make sure you understand the new tax rate and how it will affect your business.

  • Review your financials. Make sure you have enough cash on hand to cover the increased tax liability.

  • File your returns on time. Penalties for late filing and late payment can be significant.

  • Consider working with a tax professional. A tax professional can help you understand the new tax rate and ensure that you are compliant with your tax obligations.

The percentage tax reverting back to 3% is a significant change for businesses in the Philippines. Businesses that are subject to the percentage tax should be prepared for the impact of this change.


Percentage Tax Reverts Back to 3% Effective July 1, 2023
Percentage Tax Reverts Back to 3% Effective July 1, 2023

(Percentage Tax Reverts Back to 3% Effective July 1, 2023)

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