BIR Considers Expanding Tax Abatement Program to Small Businesses

 

The Bureau of Internal Revenue (BIR) is considering broadening its one-time tax abatement program to cover small businesses with annual gross sales of at least ₱3 million but below ₱20 million, extending potential relief beyond micro-enterprises.

BIR Commissioner Charlito Martin Mendoza said the proposed expansion could help more businesses settle outstanding tax obligations while allowing the agency to resolve long-pending cases. The existing program, launched in June, is currently limited to micro taxpayers with annual gross sales below ₱3 million.

As of October 24, the initiative had received 17,101 applications, with 15,050 approved. A total of ₱266.79 million in taxes and penalties had been covered by the abatement, including ₱42.05 million in basic taxes and ₱224.74 million in compromise penalties.

Under the current rules, eligible micro taxpayers with covered basic taxes and/or penalties totaling no more than ₱80,000 for a taxable year can settle their obligations by paying a fixed ₱5,000 abatement fee, subject to the program's conditions.

The measure covers qualified taxpayers with delinquent accounts, preliminary or final assessments, whether disputed or undisputed, and open stop-filer cases existing as of December 31, 2025. Eligible businesses that have already ceased operations may also apply.

The program offers qualifying taxpayers a simplified settlement option, replacing potentially larger accumulated liabilities with a prescribed payment. For the BIR, it also provides a mechanism to clear unresolved cases that would otherwise continue to consume administrative resources.

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

To streamline the process, the BIR updated its Offline eBIRForms Package to accommodate abatement payments through BIR Form 0605. The agency has also directed its Revenue Regions and Revenue District Offices to inform eligible taxpayers and provide assistance with applications.

The one-time tax abatement program remains open until December 31, 2026. Businesses considering the offer should check the eligibility requirements and applicable conditions with the BIR before making payment.