DOF: Amnesty on delinquencies, estate tax to generate P27.54B in 2019
MANILA, Philippines – The Department of Finance (DOF) expects to collect P27.54 billion from the amnesty on delinquencies and estate tax scheduled in the second half of the year.
At the general membership meeting of the Tax Management Association of the Philippines (TMAP) on Thursday, Finance Undersecretary Mark Dennis Y. C. Joven said DOF had estimated additional revenues from estate tax amnesty to reach P6.28 billion, while amnesty on delinquencies would generate a bigger P21.26 billion.
Had President Rodrigo Duterte not vetoed the general tax amnesty provision of Republic Act (RA) No. 11213 or the Tax Amnesty Act of 2019, another P6.82 billion would have been collected from delinquent taxpayers.
But Joven noted that as the President had indicated in his veto message, general tax amnesty must be coupled with safeguards, specifically the lifting of bank secrecy for tax purposes as well as automatic exchange of information in order to strengthen enforcement against tax evasion.
The Bureau of Internal Revenue (BIR) was already preparing the implementing rules and regulations (IRR) for RA 11213 through two separate revenue regulations (RRs), one each for amnesty on delinquencies and estate tax amnesty, Joven said.
BIR was also coming up with applicable forms to be used by taxpayers who will avail of these amnesty programs, he added.
Given the line vetoes made by the President, implementation of these two amnesty programs cannot be made at the same time, according to Joven.
The amnesty on delinquencies, which had not been included in previous tax amnesties, will allow payments of a smaller amount of interest and surcharges for final assessments that taxpayers can no longer appeal.
For delinquencies and assessments that have become final and executory, the tax amnesty rate will be 40 percent of the basic tax assessed.
A higher rate of 50 percent will be slapped against tax cases that were subject to courts’ final and executory judgment.
An amnesty rate of 60 percent will apply to pending criminal cases with criminal information filed with the Department of Justice (DOJ) or the courts for tax evasion and other criminal offenses under the Tax Code, with or without assessments duly issued.
In the case of withholding agents that withheld taxes but did not remit them to the BIR, they can pay 100 percent of the basic tax assessed.
As for estate tax amnesty, RA 11213 provided for the collection of only 6 percent of a deceased’s total net estate at the time of death, for those who died on or before December 31, 2017.
Joven said that general tax amnesty could be implemented this year if the current 17th or the upcoming 18th Congress will pass a bill that carries with it the automatic exchange of information and removal of bank secrecy.
The DOF official told reporters after the meeting that the 17th Congress still has time during the lame-duck session after the May 13 midterm elections to pass such measure.
If Congress can soon pass general tax amnesty with the safeguards wanted by President Duterte, its implementation “may still be within the year… so potential revenues from the general tax amnesty can still come in within 2019,” Joven said.
General amnesty was supposed to cover all unpaid internal revenue taxes, except customs and import duties, in 2017 and prior years.
“We welcome the passage of the Tax Amnesty Act of 2019. With this landmark legislation, availers may now free up property that have long been estate-locked and allow heirs to make efficient economic use of these properties. This also allows those who have long-due liabilities and pending criminal cases to start anew scot-free provided that they pay the tax amnesty of delinquencies,” Joven said.
“We hope that in availing this amnesty—a very generous reprieve from the state, taxpayers may be more encouraged to pay the right taxes moving forward,” he also said. /kga
