THE GOVERNMENT will prepare early next year a draft tax amnesty measure, the Department of Finance (DoF) said.
“We’ll start it next year. Early, I mean the process,” Finance Secretary Carlos G. Dominguez III told reporters last week.
Budget Secretary Benjamin E. Diokno announced earlier this month that the government may offer the amnesty program next year, noting that the administration of President Rodrigo R. Duterte has proven its seriousness in dealing with big-time tax delinquents.
Mr. Dominguez said: “We agree with him,” even as he admitted that “we haven’t discussed it yet.”
“We think that the tax amnesty… should be offered most likely next year.”
Finance Undersecretary Antonette C. Tionko said that a tax amnesty program may not need legislation. “[G]enerally, amnesty needs legislation, but there are ways to do it administratively,” Ms. Tionko said without elaborating.
Mr. Dominguez said the DoF will have to also determine if the tax amnesty will immediately cover all or if it will be done in phases.
“We haven’t really determined yet, but certainly I think we will start with the estate taxes,” he said, referring to the estate tax amnesty provision under the first of up to five packages of the Tax Reform for Acceleration and Inclusion that was approved successively on second as well as third and final reading in the Senate yesterday.
The House of Representatives approved its own version on March 31 after the bill was filed in that chamber in January. The DoF submitted its draft to both chambers of Congress in September last year.
The Senate version, under Senate Bill No. 1592, among others allows payment by installment of total estate tax liability within two years of start of amnesty offer without penalty and interest.
“There are a lot of taxpayers who cant pay because the interest is 20% per annum,” Mr. Dominguez said.
Estate taxes — levied on inherited assets — have been tagged as an area that can be tapped for additional tax revenues.
Mr. Dominguez said the DoF has yet to project the government’s take from an estate tax amnesty, but the past administration of former president Benigno S.C. Aquino III had estimated that the Bureau of Internal Revenue could collect up to P50 billion annually in estate taxes from just P850 million-P1 billion yearly then.
The government last implemented an amnesty program covering all national taxes in 2007, under which it collected some P4.91 billion, according to Bureau of Internal Revenue data.
The government expects to rake in P2.258 trillion in tax revenues this year, and it has so far collected 72.59%, or P1.639 trillion. In 2018, the government seeks to collect P2.671 trillion in taxes. Bigger revenues are programmed to help fund the government’s P8.44-trillion infrastructure build until 2022. — Elijah Joseph C. Tubayan