MANILA, Philippines – Amnesty on tax delinquencies will start next month, giving taxpayers with long-due liabilities and pending criminal cases a clean slate.
On the sidelines of the Senate Tax Study and Research Office’s tax forum on Thursday, Finance Undersecretary Antonette C. Tiokno told reporters that the revenue regulations (RR) covering tax amnesty applications on delinquencies under Republic Act (RA) No. 11213 or the Tax Amnesty Act of 2019 was already being finalized.
The Bureau of Internal Revenue (BIR) last week held a public consultation wherein it also released the proposed RR that will serve as implementing rules and regulations (IRR) of RA 11213’s provisions on the upcoming amnesty on delinquencies.
“We can implement it once the IRR is out and published. Our schedule is by next month, April to implement it already,” Tionko said.
Under RA 11213, BIR had been tasked to come out with the RRs to implement the amnesty on delinquencies and estate tax amnesty within 90 days after the law was signed by President Rodrigo Duterte last February 14.
The Department of Finance (DOF) had estimated the amnesty on delinquencies to generate P21.26 billion during its implementation for one year after the issuance of the RR.
This will be the first-ever amnesty on delinquencies in the country.
It will cover all national taxes—capital gains tax, documentary stamp tax, donor’s tax, excise tax, income tax, percentage tax, value-added tax (VAT), and withholding tax—for the taxable year 2017 and previous years.
Under the Tax Amnesty Act of 2019, delinquencies and assessments that have become final and executory will have an amnesty rate of 40 percent of the basic tax assessed.
A higher rate of 50 percent will be slapped against tax cases still subject to courts’ final 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 will pay 100 percent of the basic tax assessed.
Finance Undersecretary Mark Dennis Y. C. Joven earlier said there were about P80 billion in delinquencies pending in the BIR’s books.
Citing that BIR had a “zero batting average” on the tax evasion cases it files with the DOJ, Joven had said the government “needed a mechanism to ensure that we clear the dockets and free the time of BIR employees to proceed against really errant taxpayers and involving more recent cases,” hence the amnesty on delinquencies.
From 2005 to 2018, only 10 or less than 1 percent of the 1,064 cases filed by the BIR under its Run After Tax Evaders (Rate) program were resolved by courts in favor of the government.
As for the estate tax amnesty also included under RA 11213, Tiokno said its regulations would be “a bit more complex.”
“We just need to clarify issues, those that need coordinating with other agencies like the LRA [Land Registration Authority]” before the draft RR will be released by the BIR to the public for consultations, Tionko said.
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.
Estate tax amnesty was expected to generate P6.28 billion when implemented during a two-year period. /kga