DOF plans 3 tax amnesty programs

The Department of Finance (DOF) is planning to implement three types of amnesty programs for taxpayers with unpaid internal revenue taxes with the Bureau of Internal Revenue (BIR).

In an interview, Finance Secretary Carlos Dominguez said the government is considering to roll out amnesty programs for estate tax delinquencies, general tax liabilities and pending tax cases in the court.

“There are three kinds of amnesty we want: We want to give an amnesty for the estate taxes that were not paid so that assets can be developed,” Dominguez told reporters after the launch of the 51st Asian Development Bank Annual Meeting in Manila.

“Second, we want amnesty for those who have not paid the correct taxes in the past, and that will be based most likely on your total declared assets,” he said.

“The third amnesty that we want is those who have cases. We’ll just request the authority from Congress to settle it below what is allowable in the law,” he added.

According to the Dominguez, the amnesty program would not only generate more revenue for the government, but also provide a “clean slate” for taxpayers with existing liabilities.

The finance chief, however, provided no estimate yet of the amount the tax amnesty program would yield. “That’s really hard to tell, but it should be quite significant. It’s not so much the amount, it’s the fact that we start with a clean slate. I think everybody should start with clean slate,” he said.

For the program to be effective, Dominguez said any legislative bill approving the amnesty program should also come with amendments in bank secrecy “That’s part of the legislation, that we should relax Bank Secrecy Law in cases where there is a suspicion of money laundering or tax evasion, etc.,” Dominguez said.

Earlier, Dominguez said the DOF supports House Bill 7105, filed by House Speaker Pantaleon Alvarez, majority leader Rodolfo Fariñas, and House ways and means chairman Dakila Carlo Cua.

The measure aims to enhance revenue administration and tax collection by granting an amnesty on all unpaid internal revenue taxes imposed by the national government.

Under the bill, taxpayers who seek amnesty should pay a rate of eight percent of their networth covering taxable year 2017, or P10,000 to P10 million – depending on their taxpayer classification – whichever is higher.

A tax amnesty program is part of the Package 1B of the Comprehensive Tax Reform Program (CTRP) to supplement the Tax Reform for Acceleration and Inclusion (TRAIN) Act.

Aside from tax amnesty, Package 1B involves adjustments in the Motor Vehicle Users Charge and amendments in the Bank Secrecy Law.