BIR to expand tax abatement program to small taxpayers

MANILA, Philippines — The Bureau of Internal Revenue (BIR) is looking at increasing the gross sales threshold of its one-time tax abatement program to benefit more small taxpayers.

The agency said the program has already benefited 3,929 taxpayers, while P266.79 million in taxes and penalties were abated as of Oct. 24.

“We are now looking at expanding the one-time tax abatement to include small taxpayers, or those with annual gross sales of P3 million to below P20 million. This can extend the same relief to more small businesses, while also helping the BIR close long-pending open cases,” BIR Commissioner Charlito Martin Mendoza said.

The program, which started in June, currently covers micro taxpayers with annual gross sales below P3 million.

Under the program, qualified micro taxpayers with covered basic taxes and/or penalties of no more than P80,000 for a taxable year may settle their obligations by paying a P5,000 abatement fee, subject to prescribed conditions.

The program has received 17,101 applications, of which 15,050 had been approved as of Oct. 24. Of the P266.79 million abated, P42.05 million represented basic taxes and P224.74 million represented compromise penalties.

The one-time abatement program qualified micro taxpayers with delinquent accounts, preliminary or final assessments whether disputed or not, and open stop-filer cases as of Dec. 31, 2025. It also covers eligible taxpayers who have ceased business operations.

The initiative was among the relief measures for micro-entrepreneurs highlighted by President Marcos in his 2026 State of the Nation Address.

The BIR has also made payment under the program more convenient by updating the Offline eBIRForms Package to support abatement payments through BIR Form 0605.

The program remains available until Dec. 31, 2026.

“Our Revenue Regions and Revenue District Offices will continue reaching out to qualified micro taxpayers and assisting them with availment. We want to make sure that those who qualify for this relief know that it is available and know where to go for assistance,” Mendoza said.