Posted on 10:22 PM, April 28, 2010 [ BusinessWorld Online ]
THE BUREAU of Internal Revenue (BIR) is considering schemes to facilitate the payment of delinquent estate taxes on properties of deceased loved ones.
Internal Revenue Commissioner Joel L. Tan-Torres said in an interview Wednesday night that the agency is mulling reducing penalties for those who would avail of the agency’s Rest in Peace (RIP) project.
"These are long and unpaid taxes so the problem of the heirs is that they don’t have money to pay given penalties. We are looking if we can reduce penalties or allow them to pay on installment basis or even allow them to sell their properties on the condition they will pay taxes," he said.
Project RIP was launched last February as part of the efforts to improve revenue collection. The project was launched as estate tax returns filed for the past years have been low.
BIR statistics showed only 29,198 estate tax returns were filed in 2007 with tax collections amounting to P649.9 million, 29,863 filed in 2008 with tax collections worth P854.9 million and 26,811 estate tax returns filed in 2009 with collections amounting to P876.8 million.
Data from the National Statistics Office, however, showed that there were 415,271 deaths in 2005 and 389,081 in 2006.
Mr. Tan-Torres said with the project in place, the BIR would be able to monitor or determine cases or records of death from sources of information such as civil registry, cemeteries, obituaries, funeral parlors and hospitals.
"Using that information, we will be the one to approach them [heirs] because in our experience in the past, even though there’s a death, the heirs do not file the returns so we will be the one to remind the heirs that they have to do this," he said.
In some cases, Mr. Tan-Torres said, the estate taxes have not been filed and paid for ten years so the tax due would be costly.
He noted that the nonpayment of estate taxes has a 25% surcharge and 20% interest per year.
"Depending on the feedback from our offices, we will look at how we can do this [scheme]," he said, adding only the penalties could be dropped but the estate taxes due would still have to be paid.
Asked how much the BIR expects to lose from condoning the penalties, he said that the agency has yet to come up with an estimate.
Mr. Tan-Torres earlier said the agency expects to collect P10.7 billion from Project RIP.
The BIR, he added, may issue a memorandum on the subject sometime in April.
The BIR is tasked to collect P830 billion this year. The agency’s collections as of the first quarter totaled P173.9 billion, exceeding its P157.7 billion goal for the period. -- Louella D. Desiderio
__________________________________________________________________
