P&A Grant Thornton

FOR MANY taxpayers, the past carries a lingering burden—the thought of missed filing of tax returns, unresolved tax obligations, and the uncertainty of when the next Letter of Authority from the Bureau of Internal Revenue (BIR) will come knocking at their doorstep. With the introduction of the General Tax Amnesty Act of 2025, a new chapter may be unfolding for taxpayers across the country.

This one-time amnesty offers individuals and businesses a chance to settle unpaid internal revenue taxes for the taxable year 2024 and prior years at reduced rates, with immunity from penalties and legal cases. This legislative move builds on the momentum of recent tax reforms, including the Ease of Paying Taxes (EOPT) Act and the CREATE MORE Act, which sought to modernize and streamline tax administration to boost efficiency and compliance. The proposed amnesty complements these reforms by offering taxpayers a second chance for relief while reinforcing transparency and accountability.

What taxes are covered?

The proposed amnesty bill covers a wide array of national internal revenue taxes, such as income tax, withholding tax, capital gains tax, donor’s tax, value-added tax, other percentage taxes, excise tax, and documentary stamp tax collected by the BIR for the taxable year 2024 and prior years, regardless of whether a formal assessment has been previously issued. 

Estate tax, which was recently covered by a separate amnesty extension under Republic Act No. 11956, is expressly excluded from the scope of the bill.

Who can avail?

The amnesty is open to all taxpayers—individuals, corporations, trusts, estates, cooperatives, and foundations—except the following:

• Withholding tax agents who withheld taxes but failed to remit the same to the BIR;
• Taxpayers with cases pending in appropriate courts involving certain offenses at the time of application of the amnesty;
• Tax cases that have been final and executory; and,
• Delinquencies and assessments that have become final and executory.

How do I compute my amnesty tax?

Taxpayers may choose between two methods of computing their amnesty tax:

• 2% of total assets as of December 31, 2024, as declared in the Statement of Total Assets; or
• 5% of total net worth as of December 31, 2024, as declared in the Statement of Assets, Liabilities and Net Worth (SALN), subject tothe  following minimum thresholds:
  1. For individuals, trusts and estates:  P100,000
  2. For Corporations, with subscribed capital of:
     1. Over P50 million: P1,300,000
     2. P20 million to P50 million: P650,000
     3. P5 million to P20 million: P350,000
     4. Below P5 million: P150,000
  3. For other Juridical Entities (e.g., cooperatives, foundations taxable as of December 31, 2024): P100,000

The two options for the computation of amnesty tax offer flexibility for taxpayers with varying asset structures, while the minimum thresholds ensure a baseline contribution across different entity types. It also encourages voluntary tax compliance by waiving penalties and interest on unpaid taxes.

When and where to file?

Taxpayers must submit a sworn General Tax Amnesty Return along with either a notarised Statement of Total Assets or SALN, as the case may be, within one (1) year from the effectivity of the Implementing Rules and Regulations of the Act.

The return may be filed electronically or manually through authorized agent banks, Revenue District Offices (RDOs), or accredited software providers. The payment of the amnesty tax shall be made at the time the return is filed.

The Acceptance Payment form, which will be issued by the BIR upon payment, together with the General Tax Amnesty Return, shall be submitted to the RDO upon completion. Upon receipt, the BIR will issue a Certificate of Availment within fifteen (15) calendar days. Importantly, the bill highlighted that the availment of the General Tax Amnesty does not imply admission of any criminal, civil or administrative liability. 

To encourage prompt compliance, the bill also offers tiered discounts depending on how soon the amnesty tax is paid following the effectivity of the IRR:

• 20% discount for payments made within the first three months 
• 15% discount for payments made between the fourth and the sixth months; and
• 10% discount for payments made between the seventh and ninth months.

The amnesty process is structured to promote accessibility and administrative efficiency, ensuring that taxpayers can comply without undue procedural burden. In addition, the time-bound incentives embedded in the bill serve as a strategic mechanism to encourage early participation, reflecting the government’s intent to accelerate and maximize the program’s impact. 

What are the immunities and privileges granted?

Upon full compliance, taxpayers who avail of the General Tax Amnesty will be immune from the payment of taxes, surcharges, interest, and penalties for the taxable year 2024 and prior years, and shall not be subject to any civil, criminal, or administrative cases arising from such liabilities. 

Additionally, their submitted declarations shall be treated with utmost confidentiality and shall not be used in any investigation or prosecution. Furthermore, their books of accounts for the covered years shall not be subject to audit by the BIR, except in limited cases such as claims for tax refunds, tax credits, tax incentives, and exemptions under special laws. 

These privileges offer meaningful protection and closure for compliant taxpayers, reinforcing the amnesty’s role as a reset mechanism rather than a penalizing measure.

What are the safeguards and penalties?

To address past concerns over tax evasion and ensure the integrity of the amnesty program, the bill authorizes the BIR to verify the accuracy of the submitted Statement of Total Assets or SALN, within one (1) year from the filing of the amnesty return. If a taxpayer is found to have understated total assets or net worth by 30% or more, the availment shall be nullified, and the taxpayer shall be subject to applicable penalties under existing laws. 

The BIR is also authorized to access the taxpayer’s bank deposits and related financial information held by local and foreign institutions. This includes the authority to exchange information with foreign tax authorities pursuant to international agreements.

These provisions strike a balance between offering relief and maintaining accountability, ensuring that the program is not exploited by those seeking to conceal wealth or evade scrutiny.

What’s next?

As the General Tax Amnesty Bill moves through the legislative process, it remains subject to amendment, negotiation, and the possibility of executive veto. With potential revisions still in play, taxpayers are advised to stay informed and monitor developments closely. 

The 2025 General Tax Amnesty Bill presents a rare opportunity to resolve outstanding tax obligations and move forward with a clean slate and restored reputation—a moment of possible redemption for those who know the weight of unresolved dues all too well, and a chance to begin again with renewed fiscal integrity. For many, the amnesty offers a way out of the woods after long midnights of uncertainty. It marks a path towards a new era of clarity, closure, and a fresh start that could hopefully last forever.

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Patrick Olarte is a Manager for the Tax Advisory & Compliance Practice Area at P&A Grant Thornton. One of the leading audit, tax, advisory, and outsourcing firms in the Philippines, P&A Grant Thornton is composed of 29 Partners and 1,500 staff members. We’d like to hear from you! Connect with us on LinkedIn and like us on Facebook: P&A Grant Thornton and email your comments to business.development@ph.gt.com. For more information, visit our website: www.grantthornton.com.ph.