Tax amnesty bill up for plenary approval

The House committee on ways and means on Tuesday passed and submitted for plenary approval the substitute bill paving the way for the much-anticipated general tax amnesty being planned for next year.

The substitute to House Bills No. 3655, 3832, 4011, 4133, 4412 and 7105 was approved by the ways and means committee after it removed from the measure the earlier included provisions on amnesties for unpaid customs duties and other Bureau of Customs-collected taxes such as value-added tax as well as real estate and business taxes collected by local government units.

During the hearing, Department of Finance Director Euvimil Nina R. Asuncion reiterated the DOF’s “vehement objection” to the amnesty for customs duties and customs-collected internal revenue taxes, citing that it would be difficult to implement administratively.

Also, including customs duties and other BOC-collected taxes in the measure “would indirectly support the legitimization of illegally imported high-valued goods, which this administration has shown great opposition to,” Asuncion added.

As for the LGU-collected taxes, Asuncion said that “this administration fully adheres to the constitutional principle of local autonomy and sees the power of the LGUs to create their sources of revenue as a tool of empowerment, which we do not want to abridge through intrusive national government action.”

As such, the DOF was expected to submit separate bills covering amnesty for customs duties and other taxes as well as LGU taxes for implementation at a later period.

The DOF also proposed to base the computations of payments for the general amnesty on total asset rather than incremental or undeclared assets as the latter would be “giving the perception that we are rewarding dishonesty in declarations that are submitted to authorities,” Asuncion said.

The DOF official said that “a token figure based on voluntary declarations of assets that are self-serving and unverifiable is not acceptable.”

However, the committee retained the provisions basing the general amnesty on incremental assets.

Committee chair and Quirino Rep. Dakila Carlo E. Cua told reporters that with the measure submitted to the plenary, “I don’t think it will take that long to pass the bill, possibly within the year.”

As the DOF had wanted the tax amnesty to happen by April next year alongside the annual deadline of filing of income tax returns, Cua said that the Lower House was “really trying to do it (pass the bill) as fast as we could.”

“But there are also other items in the [House] agenda that are of equal importance. But I think we’re still on track,” Cua said.

Citing 2017 data of the Bureau of Internal Revenue, Cua said that a breakdown of its accounts receivables showed that basic taxes already reached P163 billion, and a higher P315 billion including penalties and surcharges.

“Let’s say we collect 30 percent or even 10 percent of the P163 billion, which is already the basic tax amount, that’s already P16 billion,” Cua noted.

General tax amnesty forms part of the proposed tax reform package “1B,” which also includes estate tax amnesty, higher motor vehicle user’s charge, bank secrecy relaxation and automatic exchange of information. —BEN O. DE VERA