Senator Juan Edgardo Angara on Monday expressed hope the tax amnesty bill, approved in the Senate on third and final reading, would encourage those in the formal and non-formal sector to legitimize, properly declare and pay the correct taxes without fear of civil, criminal or administrative penalties.
Angara, chairman of the Senate Ways and Means Committee, said the difficulties and the apparent heartlessness of the process partially explained why estate taxes accounted for so little of our total collections.
He said the one-time opportunity to settle tax obligations that would include estate taxes, general taxes, and delinquent accounts would soon be granted to those who had failed to pay for taxable year 2017 and prior years.
Senate Bill 2059, or the “act enhancing revenue administration and collection, and broadening the tax base by granting an amnesty on all unpaid internal revenue taxes imposed by the national government for taxable year 2017 and prior years with respect to estate tax, other internal revenue taxes and tax delinquencies add cross-border tax evasion and for other purposes,” has been approved on third and final reading.
Once the bill is enacted into law, taxpayers can avail themselves of a reprieve from all estate taxes on covered taxable years and pay a rate of 6 percent based on the total net estate.
The Bureau of Internal Revenue, the senator said, collected a little more than P4 billion in estate taxes in 2016 or only 0.28 percent of the agency’s total collections worth P1.57 trillion.
The ratio between the number of estate tax returns filed and the number of registered has remained at a low average of 7.16 percent, Angara added.
The grant of general amnesty which shall cover all national internal revenue taxes, including value-added tax and excise taxes collected by the Bureau of Customs, is also included in the bill.
In lieu of the taxes supposed to be paid, only 5 percent of the total net worth or a minimum of tax depending on the subscribed capital for corporations will be collected.
Those who will avail will need to accompany their General Amnesty Tax Return with a notarized Statement of Assets, Liabilities and Net Worth. Discounts will also be granted for early availers.
To enhance revenue collection, minimize administrative cost in pursuing tax cases and de-clog the tax case dockets pending in various courts, the bill included a provision for the tax amnesty on delinquencies.
Under this provision on TAD, taxpayers can avail themselves of 40 percent of the basic tax for delinquencies and assessments which have become final and executory, 50 percent for those subjects of pending criminal cases and 60 percent for cases subject of final and executor judgment by the courts.