THE Department of Finance (DOF) plans to implement by April this year the tax amnesty on delinquencies provision under Republic Act (RA) 11213, or the Tax Amnesty Act of 2019.
“You can implement it [the law] once the IRR [implementing rules and regulations] is out and published,” Finance Undersecretary Antonette C. Tionko said on the sidelines of the Tax Forum Series 5 on the Tax Amnesty Act of 2019 at the Senate on Thursday. “Our schedule is, by April, to implement it already.”
According to Tionko, the DOF also plans to issue next month the revenue regulations (RR) related to the law.
Under RA 11213, implementing agencies are given 90 days to ensure the issuance of the proper IRR for the amnesties, with the government eyeing to create separate RRs for the various amnesties since President Duterte exercised line vetoes when he signed the law on Valentine’s Day.
Also under RA 11213, the government is expected to provide an estate tax amnesty for one year as well as a tax amnesty on delinquencies for two years. The measure is expected to generate revenues estimated at P27.54 billion, lower than the estimated potential revenues of P63.5 billion under the DOF’s original amnesty proposal.
“It’s [tax amnesty on delinquencies] effective one year from the time of the issuance of the regulation,” Tionko said. “When they finish the IRR, it will be published, then it’s effective already; then you count one year from there.”
The DOF’s original proposal on amnesties under Package 1B of the Comprehensive Tax Reform Program (CTRP) includes measures estimated to generate revenues. These measures include estate tax amnesty (estimated to generate P6.28 billion), general tax amnesty (P13.63 billion), amnesty on delinquencies (P27.16 billion), lifting of the bank secrecy law for criminal cases, as well as the automatic exchange of information (AEOI) with P16.6 billion.
Duterte retained only the provisions on estate tax amnesty and the amnesty on delinquency taxes.
Earlier, the DOF pointed out there is an estimated P80-billion worth of tax delinquencies pending in the books of the Bureau of Internal Revenue (BIR). According to Tionko, the DOF would issue the RR for estate tax amnesty after the issuance of the RR for tax amnesty on delinquencies.
“The regulations [for estate tax amnesty] are a bit more complex, so maybe soon after that,” she told reporters. “We just need to clarify issues like those [that] need coordinating with other agencies like LRA [Land Registration Authority].”
RA 11213 seeks to enhance revenue administration and collection by granting an amnesty on all unpaid internal revenue taxes imposed by the national government for taxable year 2017 and prior years. This is with respect to estate tax and other internal revenue taxes and tax on delinquencies. The implementation of the law is expected to widen the tax base.
“The problem with the past amnesties on estate was that it was so hard to implement, this is something that should be looked into” Tionko said. “What’s the point of passing it if you can’t implement it?”
Image credits: Roy Domingo