No more tax amnesty programs — DOF

The days of cuddling tax evaders may be over as the government said it is no longer keen on extending tax amnesty programs to tax violators.

"If I had my way, there would be no more tax amnesty programs or compromises with frequent tax evaders," Finance Secretary Jose Isidro Camacho said in a recent budget hearing before the House Committee on Ways and Means.

Grilled on why the government insists on continuing tax amnesty programs that failed to yield revenues, Camacho said "this would be the last if I were to be followed."

Under the Arroyo administration, a tax amnesty program dubbed Voluntary Assessment Program (VAP) is being implemented.

VAP was launched by the Bureau of Internal Revenue through Revenue Regulations 8-2001 last month, it is meant to maximize collections this year and encourage voluntary compliance while "maintaining harmonious relations with taxpayers by minimizing inconvenience that comes with the threat of a tax audit."

Finance officials are skeptical about tax amnesty programs and even the International Monetary Fund has been trying to convince government to abolish tax amnesty programs because these have not produced positive results.The IMF has repeatedly said such tax amnesty programs are doomed to fail because it encourages tax evasion, especially big time tax violators because they know they could readily avail of the program without being penalized or sanctioned.

Under the VAP, those who avail of the program will no longer be subjected to audit except those which were found to have grossly understated their tax liabilities by more than 30 percent.

Those advocating the abolition of tax amnesty programs stressed the high incidence of non-filing of income tax in the country, which they added, justifies the need for the BIR to seriously reassess such policy.

For instance, the incidence of non-filing by individuals for compensation income is more than 70 percent and for individuals with non-wage income, the incidence is only slightly better, while corporations post an incidence of about 60 percent.