Senator Sonny Angara has vowed to prioritize an estate tax reform proposal of the Duterte administration.
Angara, chairman of the Senate ways and means committee, said estate tax rates must be reduced while tax deductible expenses—such as medical expenses incurred by the deceased— should be increased.
“The end result is that a grieving family will be spared the further anguish of paying high estate taxes which often delay the distribution of the assets to the heirs,” he said.
“This tax hurdle, plus unfamiliarity with estate taxes and cultural avoidance to discuss death-related affairs, has led families to delay settling the estate, resulting in huge penalties and surcharges while the use of assets are not maximized,” he said.
In revamping the estate tax regime, Angara assured the public that his committee will adopt a “family first philosophy” by setting rules that are easy to comply with and rates that are affordable.
“Present estate tax rates, like those for income taxes, were pegged in 1997, so it is time to adjust them because some exemptions are ridiculously low,” the senator said.
Angara said adjusting the estate tax rates to inflation “would result in doubling the tax-exempt values.”
He added that the standard deduction must also be increased from P1 million to P2 million in recognition of “the high cost of dying in the country.”
Angara’s bill also allows an authorized heir or estate administrator to withdraw up to P200,000 from the bank deposits of the deceased.
Official records show that heirs of only seven in every 100 deaths in the country settle estate taxes, accounting for one-sixth of 1 percent of total Bureau of Internal Revenue collections.