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Unpaid estate tax up to 2016 given amnesty by House

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CONGRESS will soon enact a proposal to grant amnesty in the payment of estate taxes after the bills were approved at the House of Representatives and transmitted to the Senate for action, said Quirino Rep. Dakila Cua, chairman of the House committee on ways and means.

The bill, endorsed for plenary approval by Cua, proposes a tax amnesty program covering estate taxes for the year 2016 and the previous years that have remained unpaid as of Dec. 31, 2016.

House Bill 4814 is principally authored by Speaker Pantaleon Alvarez.

The bill is one of the 186 relevant and important legislative measures passed by the House over the past 83 session days of the 17th Congress.

The bill grants immunities and privileges to taxpayers who avail themselves of the tax amnesty.

These include: 

• one, immunity from the payment of estate taxes, civil, criminal, or administrative penalties under the National Internal Revenue Code of 1997, as amended, arising from the failure to pay any and all estate taxes for taxable year 2016 and prior years; 

• second, the taxpayer’s Estate Tax Amnesty Returns for 2016 and prior years shall not be admissible as evidence in all proceedings that pertain to taxable year 2016 and prior years related to estate settlement cases before any judicial, quasi-judicial, or administrative bodies in which the defendant or respondent, and except for the purpose of ascertaining the gross estate for 2016 and prior years, the same shall not be examined, inquired or looked into by any person or government office; 

• third, the books of accounts and other records of the taxpayer for the years covered by the estate tax amnesty availed of shall not be examined.

Alvarez said a covered taxpayer, to avail himself or herself of the benefits of the tax amnesty, shall file with the Bureau of Internal Revenue an Estate Tax Amnesty Return and pay the six percent of the decedent’s or deceased person’s net estate within two years from the issuance of the Implementing Rules and Regulations of the proposed legislation. 

The IRR shall be promulgated within 30 days after the law becomes effective.

“However, the proposed tax amnesty does not cover taxpayers with pending cases, to wit: one, those with pending cases falling under the jurisdiction of the Presidential Commission on Good Government; two, those cases involving unexplained wealth or unlawfully acquired wealth or under the Anti-Graft and Corrupt Practices Act; three, those cases filed in court involving violation of the Anti-Money Laundering Law; four, those criminal cases for tax evasion and other criminal offenses under Chapter II of Title X of the National Internal Revenue Code of 1997, as amended, and the felonies of frauds, illegal exactions and transactions, and malversation of public funds and property under Chapters III and IV of Title VII of the Revised Penal Code; and five tax cases subject to final and executory judgment by the courts,” Alvarez said in his proposal.

The bill imposes the following penalties: 

–a person who, having filed a statement or Estate Tax Amnesty Return, wilfully understates the gross estate to the extent of 30 percent or more shall be subject to the penalties of perjury under the Revised Penal Code; 

–the willful failure to declare any property in the statement and/or in the Estate Tax Amnesty Return shall be deemed prima facie evidence of fraud and shall constitute a ground upon which attachment of such property may be issued in favor of the BIR to answer for the satisfaction of any judgment that may be acquired against the declarant; 

–any person who unlawfully discloses the existence of an Estate Tax Amnesty Return, or its contents, shall be penalized by a fine of not less than P150,000 and imprisonment of not less than six years but not more than 10 years. 

The bill further provides that if the offender is an officer or employee of the BIR or any government entity, he shall suffer the additional penalties of perpetual disqualification from holding public office, from exercising the right to vote and be voted for any public elective post.

Tax amnesty, as defined by the Supreme Court, is a “general pardon or the intentional overlooking by the state of its authority to impose penalties on persons otherwise guilty of violation of a tax law.”

“Simply put, taxpayers who failed to disclose their income or pay their tax liabilities from previous years are freed by the government from any civil, criminal or administrative penalties,” Alvarez said. 


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