The House of Representatives moved quickly to pass on third and final reading the tax amnesty bill, a measure high on the list of the Duterte administration’s legislative agenda and projected to contribute P114.8 billion to government coffers.
On Nov. 20, lawmakers approved House Bill No. 8554 with a vote of 213-7-0. Previously, a day after the measure was approved by the House Committee on Ways and Means, it was immediately sent for second reading approval.
Speaker Gloria Macapagal-Arroyo guaranteed swift disposition of the measure.
Nueva Ecija Rep. Estrellita Suansing, chairperson of the House Committee on Ways and Means, said the additional revenues for government is assured as soon as the measure is implemented as a law.
The bill was filed in relation to the Tax Reform for Acceleration and Inclusion Law as it seeks to address the poor tax collection record of the Bureau of Internal Revenue and other revenue agencies.
In her sponsorship speech, Suansing said HB 8554 would give erring taxpayers a chance to “come forward, start with a clean slate, and be 100% tax-compliant in the future.”
“For both formal and informal sectors, they will be absolved by settling all their undeclared assets and previous unpaid taxes without fear of civil, criminal, or administrative penalties,” she said.
The Senate had already approved its version of the bill, thus bringing it to the bicameral conference committee, where the conflicting provisions of the two versions will be reconciled.
During its second reading, House members approved the measure less than an hour after Suansing delivered her sponsorship speech of the measure urging congressional support for its swift enactment.
Suansing said the legislative proposal will also address case backlogs in both administrative and court proceedings of disputed taxes.
The solon recalled that the last amnesty the country had was in 2007 under Republic Act No. 9480 where there were about 25,017 applicants which resulted in a collection that amounted to P7.2 billion translating to 0.07% of the Gross Domestic Product.
“For the next 10 years, this will be the next amnesty that we will be applying in conjunction with one of the President Rodrigo Duterte’s legislative priorities,” she said.
HB 8554 is divided into three parts: the first part provides for Estate Tax Amnesty; General Tax Amnesty and Tax Amnesty on Delinquencies.
Under the bill, for two years, the authorized administrator or executor, or in the absence thereof, the legal heirs and recognized successors may avail of the Estate Tax Amnesty at a rate of six percent of the net estate for taxable year 2017 and prior years.
According to Suansing, more idle and unproductive properties are not good for the economy as more income opportunity will be lost.
The second part of this bill is the General Tax Amnesty, which encompasses all national internal revenue taxes like income tax, value-added tax, donor’s tax, percentage tax, documentary stamp tax, excise tax, among others.
However, this bill specifically excludes the value-added tax (VAT) and excise tax collected by the Bureau of Customs (BOC).
Suansing said it will be a one-time opportunity for the erring taxpayer to file and pay their tax returns within one-year worry-free from any penalties, surcharges, even criminal, civil, or administrative cases as long as the declaration is truthful and honest.
“At a rate of two percent of the total assets, the taxpayer will have a cordial relationship with tax authorities within one year and may move forward with a clean slate,” she added.
The third part of the bill is the Tax Amnesty on Delinquencies.
Suansing said this type of amnesty aims to decongest the dockets of BIR, Regional Trial Courts, Court of Tax Appeals and the Supreme Courts relating to those delinquent accounts with final assessments; those that have become final and executory; and those with existing pending tax evasion cases.
“The government is moving forward from these unending and tiring pursuits of non-compliant citizens by encouraging the taxpayer to merely pay at a rate of 40%, 50%, 60%, respectively, of the basic tax which excludes the penalties and surcharges should there be any imposition or decision to pay,” she said.