Government to press collection of estate taxes

By Iris C. Gonzales (The Philippine Star) Updated August 02, 2011 12:00 AM

MANILA, Philippines - The Aquino administration hopes to increase estate tax collections by stepping up efforts to monitor payments made by heirs of deceased persons, Finance Secretary Cesar Purisima said yesterday.

In a budget hearing at the House, Purisima said there would be a strong focus on estate taxes as yearly collections from this type of tax are very low.

“For the past seven years, collections have been below P1 billion,” the Finance chief said.

Purisima believes that yearly collections can go up to more than a billion. He said that in some cases, the amount could go as high as P3 to P5 billion for only one person.

“So I believe, we should be collecting more than a billion from estate taxes,” Purisima said.

In connection with this plan, the Bureau of Internal Revenue (BIR) would be investigating banks to find out if their officers are guilty of conniving with the heirs of deceased persons in order for them to skirt around their estate tax obligations.

At present, heirs of deceased persons need to pay a tax equivalent to 20 percent of the estate of the deceased.

Some individuals try to escape this provision by withdrawing the accounts of the deceased persons without declaring to the banks the incident of death.

The campaign is similar to the program launched during the time of former BIR Commissioner Joel Tan-Torres.

Through the project, the agency will monitor the payment of estate taxes which the BIR for so many years has not given much attention to.

According to data from the National Statistics Office, there were 403,191 deaths in 2004, 415,271 in 2005 and 389,081 in 2006.

Based on BIR records, however, only 29,198 estate tax returns were filed in 2007, 29,863 in 2008 and 26,811 in 2009.

These figures revealed that there is a very low number of estate tax returns filed. Collections amounted to P649.9 million in 2007, P854.9 million in 2008 and P876.8 million in 2009.

The BIR said it will coordinate with civil registers, hospitals, memorial parks, cemeteries, funeral parlors, crematoriums, judicial clerks of courts, obituaries, life insurance companies and other financial institutions, to access and secure records of the decedents.

The BIR is tasked to collect P920 billion this year, higher than last year’s actual collections of P822.39 billion.

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Aquino admin secures dismissal of BIR official

By Iris C. Gonzales (The Philippine Star) Updated July 28, 2011 12:00 AM

MANILA, Philippines - The Aquino administration has secured the dismissal of a ranking official of the Bureau of Internal Revenue (BIR) as well as the suspension of a local government treasurer being investigated for corruption.

The Revenue Integrity Protection Service (RIPS), the anti-corruption unit of the Department of Finance (DOF) has secured the dismissal of the BIR official for accumulating wealth disproportionate with his income as a public official.

RIPS won with finality its case against BIR Assistant Commissioner Edwin Abella, who was found guilty of dishonesty in 2005 for acquiring questionable wealth beyond his and his wife’s capacity.

The decision of the Ombudsman came out on Jan. 14, 2005.

In its decision, the Ombudsman said there was “substantial evidence” that Abella committed dishonesty for “acquiring vast amounts of money and properties manifestly out of proportion to his salary and other lawful means of income.

Based on the evidence filed by RIPS, the Ombudsman said it was impossible for the respondent’s net worth to increase from P3.8 million in 1999 to P8.4 million in 2002 with his earnings.

The Ombudsman found Abella guilty of not declaring in his Statement of Assets, Liabilities and Net Worth six properties he owned including real estate assets. One property was valued at P10 million.

The respondent appealed the Ombudsman’s decision, in a pleading dated Feb. 7, 2005.

Abella said the decision was “based on grave errors of facts and law and unfounded conjectures and surmises.”

However, the Ombudsman denied Abella’s motion for reconsideration in an order dated June 11, 2011.

“The respondent failed to present new evidence that would warrant a reversal of the questioned decision,” the order stated.

Meanwhile, the Ombudsman also suspended for six months without pay a ranking local government official.

Manila City Treasurer Liberty Toledo, which RIPS sued for grave misconduct and dishonesty.

The Ombudsman said: “Notwithstanding any motion, appeal, or petition that may be filed by the respondent… the implementation of this order shall not be interrupted within the prescribed period.”

With the order, the City government of Manila is expected to implement the suspension order five days from the receipt of the Ombudsman’s decision.

According to the case filed by RIPS, from 1999 to 2004, Toledo failed to declare millions worth of properties in her SALN.

The assets were found “grossly disproportionate” to her and her husband’s annual income, DOF-RIPS said.

“The evidence on hand sufficiently warrants the preventive suspension of respondent Liberty Toledo pending the conduct of administrative investigation of the instant case,” the Ombudsman said in the order.

As such, the Ombudsman said the with the nature of her duties and functions and “the influence that her position brings her continued stay in office may prejudice the investigation of the case.”

RIPS was established to investigate allegations of corrupt practices of officials and employees of the Department of Finance and revenue agencies.

To date, RIPS has already filed a total of 86 cases against 126 public officials, 51 of whom were suspended while 19 were already dismissed from service.

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