Posted on January 23,
2017 [ bworldonline.com ]
THOSE who have been
remiss in paying the estate tax on the property of a deceased loved one may
soon get a chance to wipe their slate clean, after the House of Representatives
Ways and Means committee got the ball rolling on a one-time amnesty for this
delinquency.
The House ways and means
committee, chaired by Quirino Rep. Dakila Carlo E. Cua, approved last week the
still-unnumbered bill, which substituted House Bill (HB) No. 1889 authored by
Iloilo Rep. Arthur R. Defensor Jr. (third district) and HB 3010 introduced by
Deputy Speaker Romero Federico S. Quimbo (Marikina City, second district), both
titled “An Act Granting Amnesty in Estate Tax.”
Mr. Cua said in a text
message yesterday that “the amnesty rate is 6% and penalties waived,” meaning
that those who will avail the tax amnesty will need to pay a single tax rate of
6% on the value of the net estate.
The National Internal
Revenue Code of 1997 currently exempts from tax a net estate of up to P200,000,
and levies 5%, 8%, 11%, 15% and 20% depending on which bracket the property
belongs.
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.
Besides contributing to
an overall increase in much-needed revenues, the amnesty is designed to free up
properties -- encumbered by such liability -- for productive use.
The bill grants 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 the books of
accounts and other records of the taxpayers for the years covered by the
amnesty will not be examined.
Mr. Defensor said the
Bureau of Internal Revenue itself backs the plan since estate tax take has been
“insignificant compared to the overall tax collection.”
He added there are many
properties tied up to billions of pesos worth of unsettled estate tax that have
become “idle capital.”
“If these properties are
sent back to commercial circulation and are made subject to transaction such as
sale, lease, or joint venture, in the long run, they can generate more taxes,”
said Mr. Defensor.
Mr. Quimbo said that,
under the measure, “properties that are caught in a bind, not being utilized
and are not being part of the economy, because estate taxes have remained
unpaid, are brought back to commercial circulation.”
“The primary cause of the
inability to settle estate tax is due to high estate tax rates and, secondly,
the inability to cope with the penalties that have accrued. In 95% of the
cases, the penalties are even higher than the value of the properties,” noted
Mr. Quimbo.
Asked if the House
leadership would support the measure, Speaker Pantaleon D. Alvarez replied
“Yes” in a text message.
A similar proposal was
filed in the 16th Congress, but failed to pass even the committee level.
At least eight similar
measures are pending before the Senate ways and means committee. -- Raynan F.
Javil
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