RMC 27-2017 : CLARIFYING the Basis for the Imposition of Tax on the Sale, Exchange or Other Disposition of Real Property


Tax amnesty ‘most likely’ -- Dominguez

Posted on April 08, 2017 [ bworldonline.com ]

MACTAN, Cebu -- The Department of Finance (DoF) is considering a tax amnesty offer after the success of a similar program in Indonesia that netted $330 billion, but it will first show it means business by making an example of a local cigarette maker it believes tried to cheat the government of nearly P10 billion in excise levies.

Finance Secretary Carlos G. Dominguez III said the government must first demonstrate determination to enforce the law and go after tax evaders. -- WWW.PCOO.GOV.PH
“We will most likely come up with a similar tax amnesty program,” Finance Secretary Carlos G. Dominguez III said in an interview with Bloomberg Television in Mactan, Cebu on Friday when asked if the country will offer amnesty similar to Indonesia's eight-month program that ended on March 31.

But he said the government must first demonstrate determination to enforce the law.

“The first part of our strategy... is to show the population that we will go after tax evaders,” Mr. Dominguez said.

“... [I]n fact, we have already filed a case, the largest tax case filed in recent years.”

Mr. Dominguez was referring to the P9.564-billion tax evasion complaint filed with the Justice department last month against Mighty Corp., which was allegedly found to have used fake excise tax stamps following a raid by the tax and customs agents on a warehouse in Pampanga.

“The tax amnesty will not work if they don’t believe you can actually go after them. So first we have to go after them,” he said.

The amnesty, however, will have to start legislation in the House of Representatives, which last February approved a bill offering amnesty for estate tax delinquents. House Bill (HB) No. 4814, or the proposed Estate Tax Amnesty Law, seeks to grant such individuals immunity from civil, criminal or administrative penalties; as well as provide that 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.

Also pending in the House is the first of four planned tax reform packages cumulatively designed to raise more revenues while shifting the burden away from low wage earners towards those who can afford them.

In its configuration as of Jan. 30, the first package -- targeted for approval in that chamber next month -- was to result in P139.6 billion in foregone revenues from lower personal income tax, estate tax and donor tax rates as well as raise an additional P302.1 billion from reduced value added tax exemptions, as well as increased excise taxes on cars and oil products, yielding P162.5 billion in net revenues in the first year of implementation.

The government last year missed its tax revenue effort target of 14.1% of gross domestic product, or GDP, (P2.044 trillion), posting an actual 13.7% (P1.98 trillion).

The ratio, which hit 13.6% (P1.816 trillion) in 2015 and in 2014 (P1.719 trillion), broke into the 13% area in 2013 with 13.3% (P1.536 trillion).

This year, the government is targeting 14.5% (P2.313 billion), a ratio that is projected to rise to 16.1% (P2.821.3 trillion) in 2018 and further to 16.3% (P3.156 trillion) in 2019.

Increased revenues, in turn, are meant to help finance the government’s infrastructure buildup designed to spur overall economic growth to a faster pace that, in turn, will lift more Filipinos out of poverty.

The current administration is looking to increase spending on infrastructure to an equivalent of 7.1% of GDP by 2022 -- the year its term ends -- from a programmed 4.3% of GDP in 2015 and from 1.8% in 2010, according to the December issue of EconomyPH of the government’s Investor Relations Office.

This year’s P3.35-trillion national budget programs spending on public infrastructure to increase 13.79% to P860.7 billion equivalent to 5.4% of GDP from P756.4 billion, or 5.1% of GDP, in 2016.

The new Philippine Development Plan 2017-2022 approved in February aims to spur GDP growth to an annual average of 7-8% in that period from the 6.2% average in the six years under the preceding government of former president Benigno S. C. Aquino III.

The administration of President Rodrigo R. Duterte believes such pace of economic expansion is needed to slash unemployment rate to 3-5% by 2022 -- when the current government steps down -- from 5.5% last year and achieve its bottom line of cutting the national poverty rate to 14% also by then from 21.6% in 2015. -- E. J. C. Tubayan

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