BIR: Tax amnesty on delinquencies starts on April 24
MANILA, Philippines–The much-awaited tax amnesty on delinquencies, aimed at providing taxpayers with long-due liabilities and pending criminal cases a clean slate, will start on April 24, the Bureau of Internal Revenue (BIR) said Tuesday.
Revenue Regulations (RR) 4-2019 dated April 5, signed by Finance Secretary Carlos G. Dominguez III and Internal Revenue Commissioner Caesar R. Dulay was published in a newspaper of general circulation Tuesday; as such, it will take effect 15 days later or on April 24, BIR Deputy Commissioner Marissa O. Cabreros told the Inquirer.
Republic Act (RA) No. 11213 or the Tax Amnesty Act of 2019 provided for 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 years 2017 and previous years.
Under the RA 11213, 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 before 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.
“The tax amnesty rate of 100 percent… shall apply in all cases of non-remittance of withholding taxes, even if the same shall fall under [the three other categories],” RR 4-2019 read.
“In cases where the delinquent taxes have been the subject of application for compromise settlement pursuant to Section 204 of the Tax Code, whether denied or pending, the amount of payment shall be based on the net basic tax as certified by the concerned office following the procedure” under RR 4-2019, it said.
RR 4-2019 said applicants for the tax amnesty on delinquencies needed to submit the following documentary requirements: Tax Amnesty Return; duly-validated Acceptance Payment Form; Certificate of Tax Delinquencies/Tax Liabilities issued by the concerned BIR offices; and, for certain applications, a copy of the assessment found in the Final Assessment Notice/Final Decision on Disputed Assessment.
The RR also indicated the specific BIR offices where each taxpayer classification can file their tax amnesty returns, as well as the step-by-step procedures.
Taxpayers who avail of the amnesty, “upon full compliance with all the conditions set forth hereof, shall be considered settled, and the criminal case in connection therewith and its corresponding civil or administrative case, if applicable, shall be terminated,” RR 4-2019 read.
“The taxpayer shall be immune from all suits or actions, including the payment of said delinquency or assessment, as well as additions thereto, and from all appurtenant civil, criminal. and administrative cases, and penalties under the 1997 Tax Code, as amended, as such relate to the internal revenue taxes for taxable years that are subject of the tax amnesty availed of,” it said.
“The availment of the tax amnesty on delinquencies herein provided and the issuance of the corresponding Acceptance Payment Form do not imply any admission of criminal, civil or administrative liability on the part of the availing taxpayer,” it added.
The Department of Finance (DOF) had estimated the amnesty on delinquencies to generate P21.26 billion during its one-year implementation.
Finance Undersecretary Mark Dennis Y. C. Joven earlier told reporters that there were about P80 billion in delinquencies pending in the BIR’s books.
Citing that the BIR had a “zero batting average” on the tax evasion cases it files with the DOJ, Joven had said that 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, Cabreros told the Inquirer that its draft RR will be released “soon.”
The BIR had been given 90 days since the law was signed last Feb. 14 to come out with the RRs to implement the amnesty on delinquencies and estate tax amnesty.
Finance Undersecretary Antonette C. Tionko told reporters last month that the implementing rules and regulations for estate tax amnesty would be “a bit more complex.”
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 Dec. 31, 2017.
Estate tax amnesty was expected to generate P6.28 billion when implemented during a two-year period.
President Rodrigo Duterte vetoed the general tax amnesty provision of RA 11213, as it did not have 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.
General amnesty was supposed to cover all unpaid internal revenue taxes, except customs and import duties, in 2017 and prior years.
Had Duterte not vetoed general tax amnesty, another P6.82 billion would have been collected from delinquent taxpayers. /jpv