BIR Grants One-Time Tax and Penalty Abatement for Micro Taxpayers Under RR No. 4-2026

Small businesses make up the largest segment of taxpayers in the Philippines, yet they often face the greatest challenges when it comes to tax compliance. From unresolved tax liabilities to the complexities of closing a business or settling obligations with the Bureau of Internal Revenue (BIR), many entrepreneurs find themselves spending significant time, money, and effort navigating tax-related issues.

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Recognizing these challenges, the BIR has introduced a tax relief program specifically designed for micro taxpayers. Through Revenue Regulations No. 4-2026, qualified small businesses now have an opportunity to settle certain tax liabilities and penalties through a one-time abatement program, providing a more affordable and practical path toward compliance.

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On 22 June 2026, the Bureau of Internal Revenue (BIR) has issued Revenue Regulations (RR) No. 4-2026, providing qualified micro taxpayers with a valuable opportunity to settle delinquent tax obligations through a one-time abatement program.

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The regulation aims to help small businesses and individual entrepreneurs resolve outstanding tax liabilities, penalties, assessments, and open stop-filer cases, allowing them to regain compliance and move forward without the burden of accumulated tax issues.

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Who Qualifies?

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The program is available to micro taxpayers, defined as taxpayers with annual gross sales of less than ₱3 million, as provided under RR No. 8-2024. For mixed-income earners, only business income is considered in determining qualification.

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Both individual and juridical entities classified as micro taxpayers may avail of the program, including those that have already ceased business operations.

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What Cases Are Covered?

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The one-time abatement covers:

• Delinquent tax accounts as of December 31, 2025
• Tax assessments, whether preliminary or final, disputed or not, as of December 31, 2025
• Open stop-filer cases as of December 31, 2025
• Certain pending administrative and judicial tax cases
• Tax collection cases filed in court
• Cases with pending compromise settlement requests
• Cases with pending requests for abatement under existing regulations

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To qualify, the total basic tax liabilities and/or penalties for a taxable year must not exceed ₱80,000.

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How to Apply

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Qualified taxpayers must file an application for abatement with the Revenue District Office (RDO) having jurisdiction over their business. Applications must be filed manually using the prescribed BIR form and on a per-taxable-year basis.

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Applicants must clearly indicate the tax type and basic amount due for each case covered by the application. Failure to provide complete information may result in denial of the request.

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Abatement Fee

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Upon acceptance of the application, the taxpayer must pay an abatement fee of ₱5,000 using BIR Form No. 0605.

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The fee must be paid within five (5) working days from the filing of the application, and proof of payment must likewise be submitted to the RDO within five (5) working days from the date of payment.

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While the fee is generally non-refundable, it may be applied as partial payment toward the taxes or penalties sought to be abated if the application is denied or withdrawn.

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Certificate of Availment

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Once the requirements are satisfied and payment has been verified, the concerned RDO will issue a Certificate of Availment within five (5) working days.

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This certificate serves as proof that the taxpayer has successfully availed of the abatement program and that the covered case has been properly resolved and closed.

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Availment Period

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Qualified micro taxpayers may avail of the program until December 31, 2026, unless the period is extended by the Secretary of Finance upon recommendation of the Commissioner of Internal Revenue.

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Why This Matters

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RR No. 4-2026 provides much-needed relief to small businesses and entrepreneurs by offering a practical and affordable pathway to settle tax issues. For many micro taxpayers, the program presents an opportunity to clean up tax records, avoid prolonged disputes, and focus on growing their businesses with renewed confidence and compliance.

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Businesses that believe they may qualify are encouraged to consult with their tax advisors or accountants to evaluate their eligibility and prepare the necessary documentation before the availment period expires.

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Contact us at hello@yanoyancpas.com or through our Facebook page for your free assessment today.

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