Tax amnesty plan gets initial support

THE FINANCE department’s planned tax amnesty — as part of a bid to encourage compliance — has found ready support where it matters most: in the House of Representatives from which tax measures should emanate by law in the first place.

The chairman of the House Ways and Means committee — which will be the measure’s first hurdle — backs the plan even though he has not yet discussed it with Finance Secretary Carlos G. Dominguez III.

The Senate leadership, however, wants first to ascertain amnesty terms before deciding whether to support it.

“I have heard his [Mr. Dominguez’s] statements on this matter but we have not had an in-depth discussion on it,” Quirino Rep. Dakila Carlo E. Cua replied to a query in a mobile phone message last weekend.

At the same time, he added: “I am in favor of the amnesty.”

‘PEOPLE JUST HAVEN’T PAID TAXES’

Signaling its readiness to give tax delinquents a fresh start, the House in February had approved on third and final reading House Bill (HB) No. 4814, which seeks to offer an estate tax amnesty. The measure has been forwarded to the Senate for deliberations.

HB 4814, or the proposed Estate Tax Amnesty Law, seeks to grant qualified individuals immunity from civil, criminal or administrative penalties; as well as provides that estate tax amnesty returns for 2016 and prior years will not be admissible as evidence in judicial, quasi-judicial or administrative proceedings; and that books of accounts and other records of taxpayers concerned for the years covered by the amnesty will not be examined.

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.

Mr. Cua was one of the sponsors the HB 4814, together with

House Deputy Speaker Romero Federico S. Quimbo and Iloilo Rep. Arthur Defensor, Jr. (third district).

Sought separately for comment, Senate President Aquilino Martin dL. Pimentel III backed Mr. Dominguez’s plan to first make an example of suspected big tax cheats in order to show the government means business, before offering an amnesty.

“Yes, go after tax evaders — [ launch an] all-out attack against them,” Mr. Pimentel said in a text message on Saturday.

“But better not to have announced that an amnesty program is about to come.”

Asked if he would support the planned amnesty which Mr. Dominguez said last Friday was “most likely” to be offered, Mr. Pimentel replied: “Depends on the terms and cut-off date.”

Mr. Dominguez told reporters separately on Friday that the planned tax amnesty offer could turn out to be “piecemeal”, depending on the law that Congress will pass.

“Obviously it has to be piecemeal because we will target it depending on the legislation that gets passed,” Mr. Dominguez told reporters at the sidelines of the 3rd ASEAN Finance Ministers’ and Central Bank Governors’ Joint Meeting in Mactan, Cebu on Friday night.

At the same time, Mr. Domiguez said the planned amnesty will not ape Indonesia’s version, which had otherwise raked in $330 billion in the eight months ending March 31.

“No, Indonesia has a different problem. They have money outside. I don’t think that’s really our problem. They have assets I think that were equal to 40% of GDP ( gross domestic product) that was out of their country,” Mr. Dominguez said.

“Ours is different: people just haven’t paid taxes.”

‘IT GETS BIGGER AND BIGGER’

He added that Finance officials “don’t know yet the details” of the planned tax amnesty offer, nor how much in taxes have been unpaid.

“Everytime we look it gets bigger and bigger. We don’t have yet the final estimate. We haven’t measured it against GDP. We just try to measure it for the total amount,” said Mr. Dominguez.

But he is sure that the government will first make an example of big cheats.

“You know there’s a psychological effect here: if you declared a tax amnesty and they’re not afraid of you, they’ll not give you any money right? So here, they have to know that we are capable of going after people who are tax cheats. So that’s when we will announce the tax amnesty,” said Mr. Dominguez.

He cited last Friday the P9.564billion tax evasion complaint which Finance filed with the Justice department against Mighty Corp., which was allegedly found to have used fake excise tax stamps following a raid by tax and customs agents early last month.

Asked how soon amnesty could be offered, Mr. Dominguez replied: “If when we feel that people are taking us seriously.”

Sought for comment, Philippine Chamber of Commerce and Industry President George T. Barcelon said that the Finance department’s “strict stance on catching and penalizing tax evaders has made many businessmen circumspect.”

“The amnesty would allow them a chance to come clean for past oversight. The Indonesian government was in the same predicament of the huge challenge of running after erring tax payers. They opted to calibrate a reasonable percentage rate to pay for the reported hidden assets as well as term/ method of payment,” Mr. Barcelon said via text on Sunday.

Sought separately for comment, Tax Management Association of the Philippines President Maria Lourdes P. Lim said that the planned tax amnesty would be “a welcome development for taxpayers who have been remiss ( inadvertently or intentionally) of their tax obligations.”

“It will allow them to have a clean slate and start anew with the hope that they will improve in their tax compliance and contribute to nation building,” Ms. Lim said in a text message yesterday.

Ms. Lim added the planned tax amnesty “will contribute to revenue collection and may increase taxpayer base as those in the underground may surface.”

“We agree with Sec. Dominguez that we should first go after the tax evaders to prove that government is serious,” she said, cautioning that “[o]ne of the criticisms of the Indonesia model is that government is giving incentives or reward for being tax evaders.” — with inputs from