Instead of imposing additional taxes to recover forgone revenues from the proposed reduction of personal income tax (PIT), a legislator has filed a bill granting instead a onetime tax amnesty to cover an individual or corporation’s unpaid taxes for 2015 and prior years.
In House Bill (HB) 3655, Party-list Rep. Mikee Romero of 1-Pacman said the proposal seeks to condone any legal liability for non-payment of taxes from taxable year 2015 and prior years.
“One of the top priorities of President Rodrigo Duterte’s administration is to introduce reforms in the tax system. The President has also emphasized that his administration will pursue tax reforms toward a simpler, more equitable and more efficient tax system that can foster investment and job creation. This includes the lowering of personal and corporate tax rates, which gained popular support from the business sector and the populace,” he said.
The comprehensive tax-reform package, however, was seen to reduce revenue collections in the short term, and could hamper the pursuit of other reforms eyed by the government.
“To complement these initiatives, the grant of tax amnesty under certain terms and conditions, which shall cover all national internal revenue taxes for the taxable year 2015 and prior years, is a sound policy to take.
The tax amnesty will certainly yield to an immediate increase in tax collections and, at the same time, provide an opportunity to broaden our taxpayer base, as well as giving erring persons/entities another chance to reform and become more responsive taxpayers,” he said.
According to Romero, a counterpart measure has been filed by Sen. Ralph G. Recto in the Senate.
Last week legislative leaders rejected proposed offsetting measures to make up for the estimated P159 billion in foregone revenues from the planned lowering of the PIT rate.
Under the Department of Finance-backed bill, workers earning not more than P250,000 annually are exempted from the PIT. However, the bill will expand the value added tax base by reducing its exemptions, including privileges granted for senior citizens and persons with disabilities; the adjustment of excise tax imposed on petroleum products; and restructuring the excise tax on automobiles, except for buses, trucks, cargo vans, jeeps, jeepney substitutes and special purpose vehicles to cover the estimated P159-billion
revenue loss.
Romero said the tax amnesty is not as controversial and not antipoor as the DOF’s proposal, since it would “complement the initiatives” on tax-reform program of the government.
To encourage tax-payment compliance, the DOF is looking to extend the amnesty to individuals and corporations alike.
Under HB 3655, to avail himself of the amnesty benefits, any person, whether natural or juridical, may file with the Bureau of Internal Revenue a notice and tax-amnesty return accompanied by a statement of assets, liabilities and net worth as of December 31, 2015.
The bill also said any person, whether natural or juridical, may avail himself of the benefits of the amnesty under the act, and pay amnesty tax due thereon, based on his net worth as of December 31, 2015.
The amnesty fee ranges from P25,000 to as high as P500,000 based on net worth.
Aside from the condonation of previous tax assessments, program applicants will also be granted immunity from civil, criminal or administrative liabilities under the National Internal Revenue Code.
The tax-amnesty return and SALN will also be inadmissible as evidence in all proceedings pertaining to the covered taxable years and books of accounts of the applicant will not be examined.
Not covered by the condonation program are withholding-agents with respect to their withholding-tax liabilities; taxpayers with pending cases before the Presidential Commission on Good Government or are facing graft charges; and those with pending money-laundering cases.
The measure also provides that any person who makes an unlawful divulgence of tax-amnesty return shall be penalized by a fine of not less than P50,000 and a 10-year imprisonment.