MANILA, Philippines — The Senate has approved on third and final reading the Tax Amnesty Bill, which seeks to raise at least P36 billion in revenue that could help fund the government’s numerous subsidies.
Passed was Senate Bill 2059, which seeks to grant a general tax amnesty to encourage taxpayers to pay correct taxes. The House of Representatives has passed its own version at the committee level.
Senate Majority Leader Juan Miguel Zubiri expects both chambers to send the measure to President Duterte for its enactment before Christmas.
“We hope that this measure will encourage those in the formal and non-formal sector to legitimize, properly declare and pay the correct taxes without fear of civil, criminal or administrative penalties,” Sen. Sonny Angara, chair of the Senate ways and means committee, said.
“It’s difficult to press citizens to do their the duty to pay the correct taxes, if the current collection system is complicated, tedious, and confusing,” he said.
Under the measure, the amnesty covers all unpaid internal revenue taxes – estate taxes, general taxes and delinquent accounts – due for taxable year 2017 and prior years.
With the amnesty, Angara envisions “a fresh start” and that “all parties involved may be absolved and unburdened by the sins of the past.”
Under the Senate version, taxpayers can avail of a reprieve from all estate taxes, and instead pay six percent based on the decedent’s total net estate.
A similar amnesty will also be extended for all national internal revenue taxes, including value-added tax and excise taxes collected by the Bureau of Customs.
In lieu of the taxes supposed to be paid, only five percent of the total net worth or a minimum tax will be collected.
Those who avail will need to accompany their General Amnesty Tax Return with a notarized Statement of Assets, Liabilities and Net Worth (SALN). Discounts will also be granted for early availers.
The Senate proposal also covers an amnesty on delinquencies. Under this, taxpayers can avail of 40 percent of the basic tax for delinquencies and assessments which have become final and executory, 50 percent for those subject of pending criminal cases, and 60 percent for cases subject of final and executory judgment by the courts.
Those who avail of the amnesty program will be immune from payment of all taxes and the filing of civil, criminal, and administrative cases and penalties.
Any information and data provided in the tax return and the SALN shall be confidential and shall not be admissible as evidence in any proceeding. Also, the books of accounts and other records of the taxpayer for the years covered by the tax amnesty availed of shall not be examined by the BIR.
To complement the privileges granted in the amnesty, Angara said the Department of Finance and other agencies – including government financial institutions, government-owned and controlled corporations, and local government units – will have the “teeth to aggressively go after those who still would not comply after this final chance.”
The measure also aims to establish an information management system, and to allow for the automatic exchange of tax information with up to 43 partner-countries.