Last 2 days for BIR’s tax amnesty offer

The Bureau of Internal Revenue (BIR) has decided to extend to Dec. 28 the deadline for its amnesty program for late taxpayers and tax violators in a bid to generate more revenues that would help plug this year’s budgetary shortfall.

BIR Commissioner Rene G. Bañez said the extension of the agency’s voluntary assessment program (VAP) was due to the clamor of more taxpayers who want to take advantage of the program.

Bañez said he is optimistic that through the VAP, one of the bureau’s revenue enhancement measures, BIR will be able to meet its objective of maximizing revenue collection, as well as encourage voluntary compliance.

This is likely to be the last time that the BIR will extend the VAP. The program has already been extended twice. As of Dec. 15, about P2.9 billion was collected through the scheme.

Previously, Finance Secretary Jose Isidro Camacho said the government is no longer keen on extending amnesty programs to tax violators.

"If I had my way, there would be no more tax amnesty programs or compromises with frequent tax evaders," 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 allowed."

Under the VAP, taxpayers are provided a flexible manner of payment through installments, provided that the VAP amount is over P5 million.

If the VAP amount is over P5 million but not more than P10 million, 50 percent of the amount may be paid at the time of filing of the application and the other 50 percent to be paid one month after.

However, if the amount exceeds P10 million, payment may be done in three equal monthly installments, 33.33 percent of the total amount at the time of filing of the VAP application and 33.33 percent each of the immediate succeeding two months.

Finance officials are skeptical about tax amnesty programs and even the International Monetary Fund (IMF) 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 bigtime 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.