Tax amnesty package stalls in committee on LGU worries

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COMMITTEE approval for Package 1B of the Tax Reform for Acceleration and Inclusion (TRAIN) law has stalled over questions about who controls the proceeds when amnesties are declared on local taxes.

Quirino Rep. Dakila Carlo E. Cua said on Tuesday that the Ways and Means committee will need at least one more hearing to “iron out the concerns of the Bureau of Customs (BoC) and local governments.”

League of Provinces Director Angelica J. Sanchez claimed that the provisions go against the principle of local autonomy.

“I do not think that imposing a local tax amnesty would really answer… the problem of the local government units,” Ms. Sanchez said, noting that in particular she is concerned over the use of the proceeds.

“We only have one basic local tax, that’s the real (property) tax, and what we’re collecting is not really that large… but, if you grant the real (property) tax amnesty this is not going to help the provinces,” she added.

Mr. Cua said that the panel is consulting on the matter with local officials.

“We want a consultation with local officials because it affects them but any collections from the amnesty regarding local taxes should go to local governments,” Mr. Cua said.

Finance Assistant Secretary Mark Dennis Y.C. Joven also urged that a tax amnesty for unpaid customs duties, internal revenue taxes and local government taxes be separated from the package.

The tax amnesty package consisted of an estate tax amnesty, a general tax amnesty, a tax amnesty on delinquencies, an amnesty on customs duties and taxes collected by the Bureau of Customs, a real property tax amnesty and a local business tax amnesty.

“We propose that we just split up the one proposed and separately (file a bill) for customs duties and internal revenue taxes collected by the BoC and for the third type for local government-collected taxes,” Mr. Joven said.

He explained that the three types of taxes are collected by separate entities, making it difficult to “create a single consolidated database.”

BoC lawyer Karen Anne Yambao said the measure imposes an amnesty even on cases with pending seizure proceedings, which she said are “subject to criminal charges.”

“The provisions would allow unlawful importation and allow those who practice unlawful importation to find amnesty,” she said. — Charmaine A. Tadalan