The House of Representatives committee on ways and means on Tuesday approved with amendments the bill seeking to extend by another two years the availment of the estate tax amnesty, as prescribed under Republic Act 11213 or the “Tax Amnesty Act”.
The panel, chaired by Albay Rep. Joey Sarte Salceda, approved House Bill 7409 which proposes to extend the availment period of the estate tax amnesty from June 15, 2023, to June 14, 2025.
“This committee hereby directs the secretariat to prepare the substitute bill incorporating the amendments and style and the corresponding committee report and file the same with the Committee on Rules this week,” Salceda said.
One of the bill’s authors, AGRI Party-list Rep. Wilbert T. Lee welcomed the committee action on the bill which is set for second reading approval when session resumes on May 8.
Lee earlier filed HB 7842, Lee which aims to provide taxpayers enough period to settle their tax dues as the amnesty period is about to lapse on June 14, 2023 under RA 11213 or the “Tax Amnesty Act.”
“Undeniably, the pandemic significantly reduced the country’s economic activities. Numerous lockdowns and community quarantines led to the closure of businesses and unemployment. These severely affected the capacity of the people to settle their estate taxes due to lack of money and resources,” Lee said.
“With the impact of the pandemic and the high inflation rate that we still face, it is incumbent upon the government to address and lessen the taxpayer’s current burden,” he added.
RA 11213 was enacted in 2019 to “provide a one-time opportunity to settle estate tax obligations through an estate tax amnesty program that will give reasonable tax relief to estates with deficiency estate taxes.”
The Tax Amnesty Act seeks to enhance revenue administration and collection 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 on delinquencies.
Through HB 7842, taxpayers who are in the process of recovering from the effects of their losses and the impact of the high inflation rate are given an additional opportunity and protection to pay their estate taxes including increments and additions under the National Internal Revenue Code. Taxpayers shall also be immune from any related civil, criminal, and administrative penalty.
Under AGRI’s proposed amendment, the new deadline of filing for those who wish to avail of the Estate Tax Amnesty will be on June 14, 2025.
The estate tax amnesty under RA No.11213 provides taxpayers the immunity from the payment of estate taxes as well as any increments and additions thereto, and civil, criminal, and administrative cases and penalties under the 1997 Tax Code.
The law, enacted on Feb. 14, 2019, covers the estates of decedents who died on or before Dec. 31, 2017, with or without assessments duly issued before, and whose estate taxes have remained unpaid or have accrued as of Dec. 31, 2017.
“However, the Covid-19 pandemic precipitated severe contractions in economic activity and caused job losses and closed businesses. Many of the taxpayers failed to comply with the requirements to avail of the tax amnesty due to limited movement and resources,” read the explanatory note of HB No.7409.
“Thus, RA No.11213 was amended by RA No.11569 to provide an extension of the availment of the estate tax amnesty from June 15, 2021 to June 14, 2023,” it noted. RA No.11569 was enacted during the previous 18th Congress.
Salceda said estate tax is a tax on the right of the deceased person to transmit the estate to lawful heirs and beneficiaries. “RA No. 11213 was passed to provide taxpayers immunity from the payment of estate taxes until June 15, 2021,” he noted.