Gov’t mulls tax amnesty next year

By Elijah Joseph C. Tubayan
Reporter

THE GOVERNMENT may offer a general tax amnesty next year after showing it means business in running after delinquents, the Budget chief said yesterday.

“I think this is the best time to have an amnesty, now that we have established our credibility to run after those who have evaded,” Budget Secretary Benjamin E. Diokno said in a panel discussion during the Philippine Economics Society’s 54^th Annual Meeting in Quezon City.

Asked when amnesty may be offered, Mr. Diokno told reporters on the meeting’s sidelines: “Maybe in a year baka pwede na… mga next year.”

He added that mechanisms to encourage availment could include bigger discounts on settlement amounts the sooner a delinquent applies, “so there’s a sense of urgency to avail of the tax amnesty.”

Asked further on what taxes could be covered by amnesty, Mr. Diokno replied: “[L]ahat ‘yun (all of them) — unpaid taxes and fees.”

Mr. Diokno noted that the administration has proven its seriousness in dealing with big-time tax cheats, saying: “Marami na kaming kaso (We have a lot of cases).”

At the same time, he said the potential program should be a one-time offer in order to encourage availment and net many delinquents into the system.

“Pagtapos mo ‘nun (After the amnesty offer), to make it very useful, dapat gagamitin mo na ‘yung (one should use the) database mo. You have to use that and then they have to pay. Kasi ‘yun naman usually ang terms ng amnesty e: one time tapos magbayad ka na ng tamang buwis (and then you pay the right amount of tax),” Mr. Diokno explained.

“We have to establish na, ‘o mag-avail na kayo ngayon (now), otherwise huli kayo (we will arrest and prosecute you),’” he added.

“We are serious.”

Sought for details, Finance Undersecretary Karl Kendrick T. Chua said in a mobile phone message that there is “no concrete plan” yet for a tax amnesty, although “[i]n the years ahead, we may consider” offering it.

Mr. Diokno, however, said that while the Cabinet has not yet taken up the plan, “We will discuss that.”

Sought for comment, Eleanor L. Roque, P&A Grant Thornton’s Tax Advisory & Compliance head, said an amnesty will fit hand in glove in current moves to reform the country’s tax system.

“The best time for a tax amnesty is when there is a new rule, which is what we’re expecting for the tax reform,” Ms. Roque said in a telephone interview yesterday.

“So ang expectation ng taxpayers: once matapos ang tax reform (is in place) — at least package one and two… — they’ll settle all their previous obligations, and then they’ll be charged under the tax reform,” she explained.

The first of up to five tax reform packages that now awaits Senate approval — for implementation by January — will cut personal income tax rates while raising car and fuel excise taxes, imposing an excise tax on sugar-sweetened drinks, reducing value-added tax exemptions, as well as simplifying the estate and donors tax system.

The second package — scheduled to be submitted to Congress in January — will reduce the current 30% corporate income tax rate to 28% by 2019 and to 25% by 2021 and will streamline tax breaks in order to make sure that only sectors that need them can avail.

“So if ang tanong (if you are asking if it will be an) opportune time ba in a years’ time, then the answer is ‘yes’, as long as we have all the major tax reforms in place,” Ms. Roque said.

Finance Secretary Carlos G. Dominguez III said earlier that bank secrecy — now among the most restrictive in the world — must be relaxed prior to offering tax amnesty in order to make the program effective.

“Will the government ensure that the net worth or the assets that the taxpayer is declaring is true and correct? They should have a mechanism to be able to verify the truthfulness of information submitted to the government,” Ms. Roque said.

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 that will help fund its ambitious P8.44-trillion infrastructure build until 2022.