Tax amnesty on delinquencies extended to Dec 31

MANILA, Philippines — The Bureau of Internal Revenue (BIR) has further extended the ongoing tax amnesty on delinquencies until Dec. 31, giving more time for taxpayers to settle their liabilities from the years 2017 and earlier.

BIR on Saturday published Revenue Regulations (RR) No. 15-2020 signed by Finance Secretary Carlos G. Dominguez III and Internal Revenue Commissioner Caesar R. Dulay on June 19, which amended the earlier RR 4-2019 containing the original delinquencies amnesty deadline, which was a one-year period starting April 24, 2019.

As such, availment was supposed to end last April 23 but BIR had to extend the deadline four times—to May 23, June 8, June 22, and then the latest cut-off date of Dec. 31, 2020—amid the COVID-19 lockdown.

The first-ever tax amnesty on delinquencies in the country covered all national taxes—capital gains tax, documentary stamp tax (DST), donor’s tax, excise tax, income tax, percentage tax, value-added tax (VAT), and withholding tax—for taxable years 2017 and earlier.

Under this amnesty program, 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 BIR, they will pay 100 percent of the basic tax assessed.

To implement RR 15-2020, Dulay issued Revenue Memorandum Circular (RMC) No. 61-2020, where the BIR chief explained that the extension of the delinquencies amnesty program was “in consideration of the current circumstances prevailing in the country in relation to the World Health Organization’s (WHO) declaration of COVID-19 global pandemic.”

Dulay earlier told the Inquirer that the take from delinquencies amnesty reached P2.46 billion as of end-March this year.

Alongside the also ongoing estate tax amnesty, the BIR had generated a total of P3.68 billion from about 20,000 previously delinquent taxpayers, thanks to the two amnesty programs under Republic Act (RA) No. 11213 or the Tax Amnesty Act of 2019 signed by President Duterte in February last year.

RA 11213 had provided that for deaths registered on or before Dec. 31, 2017, the government shall collect only 6 percent of the decedent’s total net estate at the time of death.

The two-year amnesty giving heirs of the deceased a reprieve from their unpaid estate taxes began in May last year.

But the actual collections from these two amnesty programs so far were dwarfed by earlier estimates of the Department of Finance (DOF), which last year projected additional revenues from estate tax amnesty to reach P6.3 billion, while the amnesty on delinquencies would generate a larger P21.3 billion.

While RA 11213 had paved the way for the delinquencies and estate tax amnesties, President Rodrigo Duterte vetoed general tax amnesty pending the lifting of bank secrecy for tax purposes and automatic exchange of information.