Tax amnesty deadline extended to end-June

TAXPAYERS will have until June next year to apply for the tax amnesty program on delinquencies and the Voluntary Assessment and Payment Program (VAPP).

Bureau of Internal Revenue (BIR) Commissioner Caesar R. Dulay issued Revenue Regulations (RR) No. 32-2020 to extend the validity of the tax amnesty on delinquencies to June 30, 2021 from the previous Dec. 31, 2020 deadline.

This marked the fourth time the BIR extended the program’s deadline from the original April 23 deadline.

BIR Deputy Commissioner for Operations Arnel SD. Guballa told BusinessWorld in a text message that the tax amnesty program on delinquencies generated P3.544 billion in revenues since the program began in April 2019.

“The extension is a welcome development as this will buy time for taxpayers who may want to avail but are having challenges given the pandemic situation considering lack of resources and difficulty in complying with the requirements,” said Maria Lourdes P. Lim, the tax managing partner of Isla Lipana & Co., PwC Philippines in a text message on Tuesday.

“The extension will also benefit the government as this will result in additional collections. As you may note the projected revenue for these programs were not met primarily because of the current health crisis,” she added.

At the same time, the BIR issued RR 33-2020 moving the deadline for the availment of the VAPP to June 30, 2021, from the initial deadline of Dec. 31, 2020. The program, which was launched in September, allows taxpayers to voluntarily settle their tax arrears.

“We are delighted that the VAPP has been helping our small and medium taxpayers settle their 2018 tax obligations while also generating additional revenue collection for the BIR. The same goes with the [tax amnesty] program,” Finance Undersecretary Antonette C. Tionko said in a statement on Tuesday.

“By further extending the two programs, we hope to help more taxpayers settle their tax deficiencies amid the pandemic,” she added.

The Finance department said the VAPP yielded over P200 million in tax collections in the first three months of the program.

It covers all internal revenue taxes for the taxable year ending Dec. 31, 2018 and fiscal year 2018 — ending July 2018 up to June 2019.

RR 33-2020 also issued additional guidelines to accurately assess VAPP applications, requiring documents such as discrepancy notices to support denials and invalidation of availment.

The BIR said taxpayers that will secure a certificate of availment of the program will not be audited for its pending tax obligations in 2018, while ongoing audits will also be suspended.

Approved applications can also be deemed invalid if taxpayers were found to underdeclare their sales, receipts or income; overstate deductions; and if they have unremitted withheld tax.

Aside from the tax amnesty on delinquencies, the government’s estate tax amnesty program is also currently ongoing. It provides for a fixed 6% tax rate of the total net estate of persons who died on or before Dec. 31, 2017, and grants immunity from all other estate taxes and penalties incurred in the past.

The BIR has so far collected P1.58 billion from the estate tax amnesty program, according to Mr. Guballa. The program is valid until May 31, 2021.

The two tax amnesty programs generated P5.125 billion so far this year, falling short of the Finance department’s P27-billion target when Republic Act 11213 or the Tax Amnesty Act was at its early stages.

As of end-May, the BIR collected P2.5 billion from the tax amnesty program for delinquent accounts which started in April 2019. — Beatrice M. Laforga