DOF to review past tax amnesty programs

The Department of Finance (DOF) is conducting an audit of the past tax amnesty programs implemented by the government to determine if providing amnesty had been successful at any time in the past.

Acting Finance Secretary Juanita Amatong told reporters that the DOF’s official policy is to support revenue-generating measures in Congress, especially at a time when the government is dealing with a significant budget deficit.

"We have no idea yet how much revenue this amnesty program is going to generate for us in the future and that is what we have to find out," Amatong said.

The tax amnesty bill has been quietly pending in Congress but the DOF has been holding back its recommendation for Malacañang to classify it as an urgent measure despite the strong lobby of the Filipino-Chinese community.

The proposed tax amnesty would allow delinquent taxpayers to declare their statement of assets, liabilities and net-worth (SALN) and then pay a minimal amnesty tax for taxable year 2001 and prior years.

If they qualify for amnesty, the bill proposes to give delinquent taxpayers immunity from civil, criminal or administrative penalties under the National Internal Revenue Code (NIRC), the Revised Penal Code and the Anti-Graft and Corrupt Practices Act.

The Federation of Filipino-Chinese Chamber of Commerce and Industry (FCCI) has been lobbying for Malacañang to certify the bill as an urgent measure but the DOF said President Arroyo is still waiting for the department to make its recommendations on the proposed measure.

"Initially, the DOF’s position is supportive because it is more realistic to allow delinquent taxpayers to come cleanly rather than going after them with penalties and criminal cases which has proven difficult if not nearly impossible," said Finance Undersecretary Grace Tan earlier.

The DOF said it is supportive of the provisions that required the submission of the SALN since this would flush out delinquent taxpayers once and for all. Ultimately, the DOF said this will enable new individual and corporate taxpayers to surface and be added to the tax rolls, expanding the existing tax base and improving future revenue collections.

However, the DOF said it is opposed the major provision giving amnesty even to taxpayers with pending cases under the Anti-Graft and Corrupt Practices Act as well as those under the jurisdiction of the Presidential Commission on Good Government.

The DOF also wanted the tax amnesty program to exclude and disqualify those with pending cases under the Anti-Money Laundering Law as well as cases involving felonies of fraud, illegal transactions, and malversation of public funds and property.

Tan explained that delinquent taxpayers involved in such cases should not qualify and get away with their original crimes. "The amnesty should only apply to those who legitimately acquired their assets but did not pay the right taxes," she said. "If they got their assets from illegal means, then they should not qualify for amnesty."

The DOF also wanted some adjustments in the proposed amnesty tax applicable on all unpaid internal revenue taxes imposed by the government for 2001 and prior years. The bill proposed to base the tax on the net-worth as of Dec. 31, 2001 declared by the filer in the SALN.

The power of the proposed amnesty program, however, would be on the generation of a database of taxpayer information that the Bureau of Internal Revenue (BIR) could use in the future.

"By having a credible taxpayer information database, taxpayers will be constrained from erring and evading the payment of taxes because they know that the risk of detection has become considerably high," the DOF said.