account of Presidential Proclamation No. 572, revoking the general amnesty granted to the participants of the 2003 Oakwood mutiny, as well as the 2007 Manila Peninsula siege.

Nowadays, a different kind of “amnesty” is gaining ground: one that is less controversial and can prove to be beneficial for the Bureau of Internal Revenue (BIR) and taxpayers alike. The House of Representatives has approved House Bill (HB) 8554, the proposed “Tax Amnesty Act of 2018,” covering tax liabilities for taxable year 2017 and prior years, with or without tax assessments, that have remained unpaid as of Dec. 31, 2017. HB 8554 is sponsored by House Ways and Means Committee chairperson Estrellita B. Suansing of the second district of Nueva Ecija.

HB 8554 is comprised of three separate tax amnesty programs: an estate tax amnesty, a general tax amnesty, and a tax amnesty on delinquencies. Taxpayers who have availed of the tax amnesty shall be immune from the payment of taxes as well as any additional civil, criminal, and administrative penalties under the National Internal Revenue Code (NIRC).

Under the estate tax amnesty, estates of decedents who died in 2017 and prior years may pay an amnesty tax of 6 percent based on the decedent’s total net estate at the time of death.

Under the general tax amnesty, any person, natural or juridical, may pay an amnesty tax of 2 percent based on the taxpayer’s total assets as of Dec. 31, 2017, as declared in a “Statement of Total Assets”. “Total assets” is defined under HB 8554 as the “amount of aggregate assets whether within or without the Philippines, real or personal, tangible or intangible, or ordinary or capital.”

Any person may enjoy the benefits and privileges under the tax amnesty on delinquencies by paying the following tax amnesty rates:

– 40 percent of the basic tax in cases of tax delinquencies and assessments which have become final and executory;

– 50 percent of the basic tax for cases subject to final and executory judgment by the courts;

– 60 percent of the basic tax for ongoing tax evasion cases; and

– 100 percent of the basic tax for withholding agents and their withholding tax liabilities.

The original draft of HB 8554 proposed amendments to the NIRC regarding the powers of the BIR Commissioner to inquire and receive information on bank deposits, and provided for the automatic exchange of tax information between the BIR and foreign tax authorities pursuant to a double taxation agreement (DTA), but these have since been removed as being violative of the Philippine Constitutional prohibition or riders. Note that Section 26 of the 1987 Philippine Constitution provides: ”Every bill passed by the Congress shall embrace only one subject which shall be expressed in the title thereof.”

Asked to comment on the removal of the constitutionally prohibitive sections, Representative Suansing said: “That’s double subject matter. That’s not allowed.”

Manila Times Source

ATTY. PEACHES ARANAS

Managing Partner LMA LAW