A Tax Relief is Here for Micro-Taxpayers!
Probably, you are wondering right now about those unsettled tax issues that you have with the Bureau of Internal Revenue (BIR). Maybe it is a delinquent account from a few years ago, an assessment notice you just recently received, or processing your business that has stopped its operations and has an ongoing stop-filer issue.
Well, here is the good news: the BIR has issued the Revenue Regulations No. 4-2026, opening a one-time tax abatement program for micro-taxpayers who have outstanding liabilities or penalties for compliance. Indeed, as BIR Commissioner Charlito Mendoza said, it is an opportunity to start with a “clean slate”
In this article, we break down what you must know about the tax abatement program as a micro-taxpayer, such as why it matters for you, who qualifies for it, and how you can avail it.
Why This Matters to You as a Micro Taxpayer
In the realities of business, especially if you are the sole owner or you are a self-employed individual, having those outstanding liabilities and penalties can be stressful. As they sit quietly in the records of the BIR, they pile up surcharges, interest, and penalties. Moreover, when you apply for a tax clearance or a BIR certification, those liabilities or penalties are blocking you from moving forward.
Without a doubt, the opportunity to settle all of these outstanding liabilities with just a small fee to pay is better than paying those that have piled up over the years gone by.
What Does the Tax Abatement Program Cover?
Who Qualifies as a Micro-Taxpayer
According to the revenue issuance, you qualify as a micro-taxpayer if your gross sales for the taxable year are below ₱3,000,000. This is outlined with the BIR classification under Revenue Regulation No.8-2024. In case you are a mixed-income earner who earns both from doing business and being employed by a company — only your business income counts in the threshold.
What Cases Are Covered
The program covers a wide range of tax cases, for as long as they existed on or before December 31, 2025. Thus, these cases are:
- Delinquent Accounts
- Tax Assessments, whether Preliminary or Final, disputed, or not
- Pending Cases under Litigation
- Tax Collection Cases
- Pending Compromise Settlement Requests
- Open Stop-Filer Cases
- Unpaid Accounts Payable to BIR
- Other cases wherein there is no basic tax due, but penalties exist
Among these cases, there is an important exception: criminal cases due to tax fraud that are filed in court, such as those under the program of Run After Tax Evaders (RATE), are generally not covered. Such fraudulent tax cases can only be allowed when the Commissioner grants it on meritorious reasons.
The ₱80,000 Threshold
To qualify for the availment of the tax abatement program, your total basic tax liability and/or penalties must not exceed ₱80,000 for a given taxable year when the combined cases as mentioned above are totaled.
How to Avail of the One-Time Tax Abatement?
Ready to settle your case? Here are the steps you need to take to avail yourself of the remedy:
- Confirming Your Eligibility: Ensure that you fall under the classification of a Micro-Taxpayer and your total liabilities outstanding in a taxable year do not exceed ₱80,000.
- Manually File Your Application with the RDO: Applications are filed on a per-taxable-year basis using the application form for the tax abatement. The said application form will be submitted to your Revenue District Office (RDO) that has jurisdiction over you.
- Specify Your Case, Tax Types, and Basic Amount Due: This step is the crucial one. The revenue issuance is explicit; if you fail to specify these matters, your application will be denied. It is best to consult with a tax professional regarding this matter.
- Pay the ₱5,000 Abatement Fee: Once your application is completed and filed with the RDO, you have 5 working days to pay the fee using BIR Form 0605, either electronically or manually.
- Submit Proof of Payment with RDO: After making your payment, you have 5 working days to submit the proof to your corresponding RDO. If you fail to do this, your application can be voided, and you may have to re-file within the availment period
- Get your Certificate of Availment: As the RDO receives your proof of payment, they have 5 working days to issue your Certificate of Availment. This certificate serves as proof that you have availed the program and you are clear of the tax liabilities you had during a taxable year.
Apart from this, it is important to note that the deadline to avail the tax abatement program is December 31, 2026 only. This can only be extended when the Secretary of Finance deems it so, with the recommendation of the BIR Commissioner.
Don’t Let This Opportunity Slide
Definitely, the tax abatement program will help many micro-taxpayers to start their business or fix their compliance issues with the BIR. With the payment of just ₱5,000 Abatement Fee per taxable year that has outstanding tax liability, there will be a lot of savings and ease for taxpayers. Truly, this is aligned with the goals of the Bureau in terms of ease of payment of taxes and doing business in the Philippines.
On the other hand, as the name implies, this is a “one-time” opportunity for small business owners or self-employed individuals to get things right and fix all of those stressful compliance issues.
If you are not sure whether your situation qualifies or in need help making sure that your application is filed accordingly, Babylon2k can walk you through it. With our team’s expertise, we can help you out with checking your eligibility to file your application for filing with the proper RDO — just send us a message or schedule a free consultation.
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