House panel extends estate tax amnesty by two years

By Charmaine A. Tadalan, Reporter

THE House Ways and Means Committee approved on Monday a measure extending the estate tax amnesty program by another two years, in light of the ongoing coronavirus pandemic.

House Bill (HB) No. 7068 extends the effectivity of the estate tax amnesty to four years from the original two years under Republic Act (RA) No. 11213 or the Tax Amnesty Act of 2019.

RA 11213, which took effect on May 31, 2019, gave a one-time opportunity for taxpayers to settle unpaid estate taxes as of Dec. 31, 2017. It gave interested parties until May 31, 2021 to avail of the estate tax amnesty.

If passed into law, taxpayers can avail of the estate tax amnesty through 2023.

“The amendment to RA 11213 will enable those who want to take advantage of this program ample time to recoup their resources and get back on their feet so they can still apply and pay their estate tax dues. This will also provide economic relief for many Filipinos at this time of crisis,” HB 7068 stated.

The Bureau of Internal Revenue (BIR) Assistant Commissioner Elenita B. Quimosing said the agency has collected some P1.3 billion from estate tax amnesty as of June, still far from the Finance department’s P6-billion target.

She said P3.403 billion was collected from the tax amnesty on delinquencies, falling short of the P21-billion target. The agency has collected a total of P4.765 billion so far from the two tax amnesty programs.

Baguio Rep. Mark O. Go moved for the approval of the extension of the estate tax amnesty to allow the BIR to meet its target.

“The conditions we have right now are reasons probably that we need to extend the availment of the estate tax,” Mr. Go said.

There is no counterpart measure filed in the Senate, but Senate President Vicente C. Sotto III said he is in favor of the extension of the estate tax amnesty.

Asked if he supports the measure, Mr. Sotto said in a phone message “yes, of course.”

In the same hearing, the House panel also tackled proposals to grant a general tax amnesty, which had been part of the original tax amnesty package until it was vetoed for lack of safeguards against tax evasion.

President Rodrigo R. Duterte vetoed the general tax amnesty for the absence of provisions lifting the bank secrecy for fraud cases and the automatic exchange of information, among others.

The substitute bill granted a general tax amnesty for one year on all unpaid taxes based on the 2018 statement of total assets, which may be availed either with a 3% or 20% rate.

“Kung 3% ka (If you avail the 3%), you will be subject to the examination of the BIR for a period of one year from the payment of the tax amnesty, pero kung (but if you go for the) 20% rate ang gagamitin mo, you will not be subject to the said examination,” House Ways and Means vice- chairperson and AAMBIS-OWA Rep.  Sharon S. Garin said.

Finance Assistant Secretary Dakila Elteen M. Napao said the general tax amnesty will allow individuals and companies with unpaid taxes but no pending cases, to have a “clean slate.”

“The amnesty will serve as a sort of a cleaning tool for the BIR on taxpayers,” he said.

Mr. Go, however, questioned the basis for the 20% rate, saying this may burden companies. He recommended to use the income as a basis, instead of the total assets.

“What is the basis of 20%? What we’re saying is the total asset of the company, medyo mabigat ’yun for them. Kung ang issue is the 2018 income nila, ’yun dapat ang basis, ’yung 2018 (that might be too heavy for them. If the issue is the 2018 income, that should be the basis),” he said.

Nueva Ecija Rep. Estrellita B. Suansing, presiding chairperson, asked the Finance department to come up with its calculation for other possible rates for deliberation in the next hearing.

The measure granting a general tax amnesty forms part of the administration’s comprehensive tax reform program. It was noted that collections from the measure will be used as additional funding for the coronavirus pandemic.