Philippine Daily Inquirer


- By Ben O. de Vera @ben­de­v­er­aINQ

Fi­nance Sec­re­tary Car­los G. Dominguez III yes­ter­day un­veiled the de­tails of the planned and much-awaited tax amnesty pro­gram aimed at shoring up rev­enues to help fund the mas­sive in­fra­struc­ture projects of the Duterte ad­min­is­tra­tion.

“This year, we hope to im­prove fur­ther our rev­enue col­lec­tions with a pro­posed tax amnesty pro­gram. The pro­gram will help clear the dock­ets as well as en­able the trans­fer of stranded real prop­er­ties so that they can be made eco­nom­i­cally use­ful,” Dominguez said in a speech be­fore the Ro­tary Club of Manila.

In par­tic­u­lar, the De­part­ment of Fi­nance is propos­ing an es­tate tax amnesty where the gov­ern­ment will col­lect only 6 per­cent of the net un­de­clared es­tate tax for those who died prior to Jan. 1, 2018, Dominguez said.

He said that es­tate tax used to be up to 20 per­cent.

The de­part­ment is also propos­ing propos­ing a gen­eral tax amnesty on all un­paid in­ter­nal rev­enue taxes ex­clud­ing in­ter­nal rev­enue taxes aris­ing from im­por­ta­tion and cus­toms du­ties, Dominguez added.

The Fi­nance chief said they also wanted to of­fer amnesty on tax delin­quen­cies, at a rate of 50 per­cent on ba­sic tax, ex­clud­ing in­ter­est charges and sur­charges.

“For those al­ready fac­ing crim­i­nal cases in court, we are propos­ing a rate of 80 per­cent of the ba­sic tax,” he added.

Dominguez ear­lier said the gov­ern­ment was eye­ing to im­ple­ment the much-awaited tax amnesty by April next year to co­in­cide with the dead­line of fil­ing in­come tax re­turns.

Tax amnesty forms part of tax re­form pack­age “1B,” an off­shoot of the Tax Re­form for Ac­cel­er­a­tion and In­clu­sion (TRAIN) Act signed by Pres­i­dent Duterte last De­cem­ber.

Be­sides a gen­eral tax amnesty, pack­age 1B also

in­cludes es­tate tax amnesty, higher mo­tor ve­hi­cle user’s charge, bank se­crecy re­lax­ation and au­to­matic ex­change of in­for­ma­tion.

Tax pack­age 1B was a re­sult of the Se­nate’s re­moval of the tax ad­min­is­tra­tion mea­sures from the orig­i­nal first tax re­form pack­age passed by the Lower House last year un­der House Bill No. 5636.

Pack­age 1B will add about P40 bil­lion in rev­enues.

The DOF was op­ti­mistic tax re­form pack­age 1B would be passed by Con­gress in the third quar­ter.

He said an­other re­form that the DOF was propos­ing was to treat value-added tax (VAT) “purely as a con­sump­tion tax.”

“As such, it will be col­lected at the point of con­sump­tion or sale, and it will be re­funded when the con­sump­tion is done out­side the Philip­pines. VAT ex­emp­tions should not be granted as in­vest­ment in­cen­tives,” he said.

In gen­eral, “the tax re­form pro­gram will as­sure us of suf­fi­cient rev­enues to fund the in­fra­struc­ture mod­ern­iza­tion and ex­pand so­cial ser­vices,” Dominguez said.

“Thirty per­cent of in­cre­men­tal rev­enues gen­er­ated from the tax re­form law will be used to pay for so­cial ser­vices. There will be larger al­lot­ments for im­prov­ing pub­lic health, up­grad­ing our ed­u­ca­tional sys­tem and pro­vid­ing con­di­tional cash as­sis­tance for the poor­est of the poor. This, af­ter all, is what mod­ern gov­ern­ments are about: look­ing af­ter the wel­fare of their peo­ple and pro­vid­ing them ef­fec­tive pro­tec­tion. Mean­while, about 70 per­cent of the rev­enues raised from the new law will be di­rected to in­fra­struc­ture mod­ern­iza­tion,” the Fi­nance chief said.

Be­sides the TRAIN law, up to five more tax pack­ages, in­clud­ing pend­ing leg­is­la­tion on cor­po­rate in­come tax­a­tion re­form cou­pled with the ra­tio­nal­iza­tion of fis­cal in­cen­tives, will be pur­sued by the Duterte ad­min­is­tra­tion.

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