An investigation on the optical properties of dilute-P GaN1−xPx alloys by First-Principle Density Functional Theory (DFT) methods is presented, for phosphorus (P) content varying from 0% up to 12.5%. Findings on the imaginary and real part of the dielectric function are analyzed and the results are compared with previously reported theoretical works on GaN. The complex refractive index, normal-incidence reflectivity and birefringence are presented and a difference in the refractive index in the visible regime between GaN and GaNP alloys of ~0.3 can be engineered by adding minute amounts of phosphorus, indicating strong potential for refractive index tunability. The optical properties of the GaN1−xPx alloys indicate their strong potential for implementation in various III-nitride-based photonic waveguide applications and Distributed Bragg Reflectors (DBR).