25-March-2017, 01:03:13 PM
[http://www.congress.gov.ph ]
The House of
Representatives recently approved on third and final reading a bill which seeks
to reduce the existing donor’s tax rate and ensure fair taxation.
House Bill No. 4903 aims
to simplify the donor’s tax rate, thus amending for the purpose Section 99 of
the National Internal Revenue Code of 1997, as amended.
Under the bill, Section 99
(A) of the National Internal Revenue Code of 1997, as amended, is further
amended to read as follows:
“A) In General. – The tax
for each calendar year shall be six percent and shall be computed on the basis
of the total net gifts made during the calendar year: Provided, that annual net
gifts not exceeding P100,000 shall be exempt.”
Under the present law, if
the net gift is:
- Not over P100,000, the
tax shall be exempt
- Over P100,000 but not
over P200,000, the tax shall be 0 plus two percent of the excess over P100,000.
- Over P200,000 but not
over P500,000, the tax shall be P2,000 plus four percent of the excess over
P200,000.
- Over P500,000 but not
over P1,000,000, the tax shall be P14,000 plus six percent of the excess over
of P500,000.
- Over P1,000,000 but not
over P3,000,000, the tax shall be P44,000 plus eight percent of the excess over
P1,000,000.
- Over P3,000,000 but not
over P5,000,000, the tax shall be P204,000 plus 10 percent of the excess over
P3,000,000.
- Over P5,000,000 but not
over P10,000,000, the tax shall be P404,000 plus 12 percent of the excess over
P5,000,000.
- Over P10,000,000, the
tax shall be P1,004,000 plus 15 percent of the excess of P10,000,000.
The bill amends Section 99
(B) of the National Internal Revenue Code of 1997 to read as follows: “(B) Tax
Payable by Donor if Donee is a Stranger. – When the done or beneficiary is a
stranger, the tax payable by the donor shall be six percent of the net gifts.
For the purpose of this tax, a “stranger” is a person who is not a:
(1) Brother, sister
(whether by whole or half-blood), spouse, ancestor and lineal descendant; or
(2) Relative by
consanguinity in the collateral line within the fourth degree of relationship.”
The present law states the
tax payable by the donor when the donee or beneficiary is a stranger shall be
30 percent of the net gifts.
Rep. Jesulito Manalo
(Party-list, ANGKLA), an author of the bill, said the reduction of the donor’s
tax intends to strike a balance between the power of the State to tax its
people and the implementation of a policy that will motivate those who have
more in life to share their properties and riches not only to the less
fortunate classes of society, but also to individuals whose lives may improve
through such donations.
“Verily, most donors are
dissuaded from giving off their properties for fear that they will have to be
accountable to pay enormous amounts of taxes, if they do. Further, in extreme
cases, donors merely circumvent the payment of the donor’s tax by cloaking
their donation through a sale transaction. This renders the donor’s taxation
system rather ineffective,’’ said Manalo.
Other authors of the bill
are Reps. Robert Ace Barbers (2nd District, Surigao del Norte), Dakila Carlo
Cua (Lone District, Quirino), Peter John Calderon (7th District, Cebu),
Victoria Isabel Noel (Party-list, AN WARAY), Rodante Marcoleta (Party-list,
SAGIP), House Speaker Pantaleon Alvarez, Majority Leader Rodolfo Fariñas, Reps.
Deogracias Victor Savellano (1st District, Ilocos Sur), and Leopoldo Bataoil
(2nd District, Pangasinan). / mvip
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