Tax amnesty set as BIR issues rules

By Melissa Luz T. Lopez
Senior Reporter

FILIPINOS with overdue tax payments may start availing of tax amnesty later this month, following the release of the official guidelines by the Bureau of Internal Revenue (BIR).

The country’s top tax-collecting body published Revenue Regulations (RR) No. 4-2019 on Tuesday which lays down the process to avail of tax amnesty for delinquent accounts up to year 2017.

Applications for tax amnesty will be available starting April 24, or 15 days after yesterday’s publication date.

Delinquent taxpayers have one year to file their request for amnesty, which will cover accounts seeking compromise settlements as they question the validity of the assessed taxes to be paid, or due to their “financial incapacity” to settle the entire amount.

The rules also cover employers’ delinquent withholding taxes and unpaid estate tax liabilities.

The RR defines delinquent accounts as those left unpaid despite being given final assessment notices or formal letters of demand by the BIR, as well as those which do not have appeals filed with the BIR commissioner or the Court of Tax Appeals over pending or disputed tax cases.

The amnesty will also cover those with tax evasion complaints or charges before the Department of Justice, prosecutor’s office or the courts.

The law sets varying amnesty rates for delinquencies charged to the basic tax.

For delinquent accounts and assessments that have been deemed final and executory, taxpayers will need to pay the equivalent of 40% of the basic tax assessed.

Those with tax cases that have been decided by the courts will have to settle 50% of the basic assessment, while those with pending criminal cases can choose to settle by paying 60% of the assessment.

Unremitted withholding taxes — personal income tax deducted from employee salaries — still have to be paid in full.

To apply for amnesty, a taxpayer needs to submit a Tax Amnesty Return (TAR) form that has been accomplished under oath, an acceptance payment form stating the amount which he paid to settle their dues, a certificate of tax delinquencies or liabilities issued by the BIR office with jurisdiction in his location and a copy of previous assessments issued by the bureau.

Non-large taxpayers must file their forms with their respective revenue district offices, while Large Taxpayers will have to submit these documents to the Large Taxpayers Division Office where they are registered.

Upon submission, the BIR has 15 calendar days to issue an Authority to Cancel Assessment, which will mean that the tax amnesty application has been accepted.

“Insofar as the tax delinquencies covered by the TAR is concerned, any notice, attachment and/or warrant of garnishment issued against the taxpayer by the concerned BIR office shall be set aside pursuant to the lifting of the said notices and warrants issued by the concerned BIR office,” the rules read, adding that availing of tax amnesty “does not imply any admission of criminal, civil or administrative liability” of the taxpayer.

This RR is treated as the implementing rules for Republic Act No. 11213, or the Tax Amnesty Act signed by President Rodrigo R. Duterte in February.

With the measure, the government hopes to raise P21.26 billion as Filipinos avail of the amnesty, which would allow them to pay their back taxes without being charged with compounding penalties for delayed settlement.