A one-time opportunity to settle tax obligations, including estate taxes, general taxes and delinquent accounts, will soon be granted to those who have failed to pay for taxable year 2017 and prior years.
The opportunity near reality after Senate Bill (SB) No. 2059 was approved on third and final reading on Monday.
“We hope that this measure will encourage those in the formal and non-formal sector to legitimize, properly declare and pay the correct taxes without fear of civil, criminal or administrative penalties,” Senator Sonny Angara, chair of the Senate Ways and Means Committee, said referring to SB 2059 titled “An act enhancing revenue administration and collection, and broadening the tax base by granting an amnesty on all unpaid internal revenue taxes imposed by the national government for taxable year 2017 and prior years with respect to estate tax, other internal revenue taxes and tax delinquencies add cross-border tax evasion and for other purposes.”
“This is our chance to have a fresh start especially in something as important as taxes. As Filipinos seek a government they can trust, let this amnesty serve as another step closer to that end,” Angara added.
Once the bill is enacted into law, taxpayers can avail of a reprieve from all estate taxes on covered taxable years and pay a rate of 6 percent based on the total net estate.
“The difficulties and the apparent heartlessness of the process partially explain why estate taxes account for so little of our total collections,” Angara said.
The Bureau of Internal Revenue (BIR), the senator said, collected a little more than P4 billion in estate taxes in 2016 or only 0.28 percent of the agency’s total collections worth P1.57 trillion.
The ratio between the number of estate tax returns filed and number of registered has remained at a low average of 7.16 percent, Angara said.
The grant of general amnesty which shall cover all national internal revenue taxes, including value-added tax (VAT) and excise taxes collected by the Bureau of Customs (BOC), is also included in the bill.
In lieu of the taxes supposed to be paid, only 5 percent of the total net worth or a minimum of tax depending on the subscribed capital for corporations will be collected.
Those who will avail will need to accompany their General Amnesty Tax Return with a notarized Statement of Assets, Liabilities and Net Worth (SALN). Discounts will also be granted for early availers.
To enhance revenue collection, minimize administrative cost in pursuing tax cases and de-clog the tax case dockets pending in various courts, the bill included a provision for tax amnesty on delinquencies (TAD).
Under this provision on TAD, taxpayers can avail of 40 percent of the basic tax for delinquencies and assessments which have become final and executory, 50 percent for those subjects of pending criminal cases and 60 percent for cases subject to final and executor judgment by the courts.
The BIR, Angara said, has more than P197.57 billion as delinquent accounts covering 2015 and prior years sitting idly in more than 58,600 cases.
Those who will avail of the amnesty program will be immune from payment of all taxes and the filing of civil, criminal and administrative cases and other penalties.