Clarifications on One-Time Abatement Program for micro taxpayers

The Bureau of Internal Revenue (BIR) issued Revenue Memorandum Circular (RMC) No. 84-2026 to clarify provisions of Revenue Regulations (RR) No. 04-2026, which sets out the guidelines and procedures for the availment of the one-time abatement of taxes and/or penalties for micro taxpayers. The program allows qualified micro taxpayers with covered tax liabilities existing as of 31 December 2025 to apply for the abatement of taxes and/or penalties, subject to the conditions set forth in the regulations. Covered liabilities may include delinquent accounts, tax assessments, and open cases, provided the applicable threshold requirements are met.

How the BIR determines micro taxpayer status

A taxpayer's micro taxpayer classification is based on BIR registration records under the Internal Revenue Integrated System - Taxpayer Registration System (IRIS-TRS) as of 31 December 2025. Taxpayers may verify their classification through the BIR's Online Registration and Update System (ORUS) using the “BIR-Registered Business Search and Taxpayer Classification Inquiry” facility or by coordinating with their respective Revenue District Offices (RDOs).

Understanding the P80,000 threshold

One of the key eligibility requirements under the program is the P80,000 threshold. For each taxable year, the aggregate amount of unpaid basic tax and compromise penalties must not exceed P80,000. Interest and surcharges are excluded from the threshold computation as they are merely incidental to the underlying tax liability. However, once a qualified liability is approved for abatement, the corresponding interest and surcharges may likewise be cancelled.

Application requirements and filing procedures

To avail of the One-Time Abatement Program, taxpayers must manually file BIR Form No. 2121 with the RDO where they are registered and submit the required supporting documents. These include a Certificate of Existence of Outstanding Tax Liability/ies (CEOTL), identification documents, and, where applicable, assessment notices and authorisation documents for representatives. Applications for taxpayers with multiple branches must be filed with the RDO having jurisdiction over the Head Office. Only applications with complete documentary requirements shall be received and processed.

Prior to filing the application, the taxpayer must secure a CEOTL from the appropriate BIR office having jurisdiction over the covered tax case. The CEOTL serves as the official document evidencing the taxpayer's outstanding liabilities as of 31 December 2025 and is used in determining qualification under the program.

Abatement fee and payment requirements

Qualified taxpayers are required to pay a one-time abatement fee of P5,000 using BIR Form No. 0605. The fee must be paid within five (5) working days from the filing of the application. Proof of payment must likewise be submitted to the concerned RDO within five (5) working days from the date of payment. 

The circular further clarifies that non-submission of proof of payment within five (5) working days from payment is not a ground for denial but will automatically void the application. In addition, any abatement fee previously paid shall not be refunded in case of denial or withdrawal of the application, although it may be treated as partial payment of the taxpayer's outstanding liabilities.

Issuance of Certificate of Availment

Upon approval of the application, the BIR shall issue a Certificate of Availment. The certificate serves as proof that:

• The taxpayer has been determined to be qualified under RR No. 04-2026;
• The prescribed documentary requirements have been complied with;
• The abatement fee of P5,000 has been paid;
• The covered tax liabilities and/or penalties are entitled to the benefits of the program; and
• The covered tax liabilities and/or penalties have been approved for abatement.

The Certificate of Availment serves as the basis for the cancellation of the covered tax liabilities and the issuance of the corresponding Authority to Cancel Assessment (ATCA). It shall be issued within five (5) working days from receipt of proof of payment of the abatement fee.

Please be guided accordingly. 

Source:  

P&A Grant Thornton  

Certified Public Accountants  

P&A Grant Thornton is the Philippine member firm of Grant Thornton International Ltd.

As published in SunStar Cebu, dated 14 August 2026