The amnesty scheme on tax delinquencies will start next month, giving taxpayers with long overdue liabilities and pending criminal cases a chance to clean their records.
On the sidelines of the Senate Tax Study and Research Office’s tax forum Thursday, Finance Undersecretary Antonette C. Tiokno said the revenue regulations covering tax amnesty applications on delinquencies under Republic Act (RA) No. 11213, or the Tax Amnesty Act of 2019, were already being finalized.
The Bureau of Internal Revenue last week held a public consultation, during which it also released the draft of what would become the implementing rules and regulations (IRR) of RA 11213’s provisions on amnesty on tax delinquencies.
“We can implement it once the IRR is out and published. Our schedule is to implement it by next month, April,” Tiokno said.
Under RA 11213, the BIR was tasked to come out with the IRRs to implement the amnesty on delinquencies and estate tax amnesty within 90 days after the signing of the law on Feb. 14.
The Department of Finance estimated that this amnesty plan would generate P21.26 billion during its one-year implementation.
The amnesty 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 previous tax years up to 2017.
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 rate of 50 percent will be applied to tax cases that are still subject to the 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 agents that withheld taxes but did not remit them to the BIR, they would pay 100 percent of the basic tax assessed.
Finance Undersecretary Mark Dennis Y. C. Joven said there were about P80 billion in delinquencies pending in the BIR’s books.
Saying the BIR had “zero batting average” on tax evasion cases it had filed with the DOJ, Joven 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.”