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House OK’s estate tax amnesty

By Raynan F. Javil
Posted on February 14, 2017 [ bworldonline.com ]

THE HOUSE of Representatives last night approved on third and final reading two measures that separately seek to grant a one-time amnesty and impose a single rate for estate tax.

File photo of the House of Representatives
   
Approved were House Bill (HB) No. 4814, or the proposed Estate Tax Amnesty Law, and HB 4815 which sets a single rate compared to the current range.

Aside from contributing to an overall increase in much-needed revenues, HB 4814 is designed to free up properties -- otherwise encumbered by liability on the part of delinquents -- for productive use.

The proposed law seeks to grant the following immunities and privileges to taxpayers who avail of the planned amnesty: immunity from civil, criminal or administrative penalties; estate tax amnesty returns for 2016 and prior years will not be admissible as evidence in judicial, quasi-judicial, or administrative proceedings; and books of accounts and other records of the taxpayers for the years covered by the amnesty will not be examined.

The amnesty will cover estate tax liabilities up to the year 2016.

Collection of appropriate estate taxes has been elusive for the Bureau of Internal Revenue, with the past administration estimating that annual take could actually go up to P10-50 billion from less than P1 billion currently.

Estate tax amnesty measures in the Senate are still pending before the Senate ways and means committee, chaired by Senator Juan Edgardo “Sonny” M. Angara.

On the other hand, HB 4815 seeks to impose a single tax rate of six percent.

The National Internal Revenue Code of 1997 exempts from tax a net estate value of up to P200,000, and levies 5%, 8%, 11%, 15% and 20% depending on which bracket the property belongs.

Those who will avail of amnesty will just pay a six percent tax on the value of the property concerned, sans penalties and sanctions otherwise provided by law.

A similar proposal to impose a single six percent amnesty tax is part of the Finance department-backed comprehensive tax reform package filed by House ways and means committee chairman Rep Dakila Carlo E. Cua (Quirino) as HB 4774.

Mr. Cua said in a telephone interview last night that the similar provision in the tax package will stay for now as HB 4815 is not yet enacted since it will now have to go to the Senate.

The Constitution provides that all tax laws should emanate from the House.


“Hindi pa naman kailangan tanggalin kasi hindi pa naman batas and it has to go through the Senate pa. Hindi rin naman contradicting (There is no need to remove it from the tax package because it is not yet a law and it has to go through the Senate. The provisions are not contradicting),” said Mr. Cua.
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