AN EXTENSION of the ongoing tax amnesty program will raise more revenue and provide relief to taxpayers, according to a study by the National Tax Research Center (NTRC).
“The Tax Amnesty Act, if extended, aside from possibly generating more revenue that can be used by the government, can provide relief to the taxpayers and enough time to avail of the tax amnesties given this pandemic crisis,” according to the study, published in the NTRC’s journal.
Currently, the government has two tax amnesty programs, covering delinquent accounts and estate taxes.
The NTRC said one of the benefits of granting tax amnesty is short-term revenue generation, noting that 14,122 taxpayers availed of the two programs last year. The bulk of the revenue was generated from those settling delinquent accounts.
The Bureau of Internal Revenue has moved the cut-off period for availing of the tax amnesty on delinquent accounts several times from the original April 23 deadline in light of the disruptions caused by the coronavirus pandemic. Taxpayers can apply for the amnesty program until Dec. 31.
Meanwhile, the deadline for the estate tax amnesty program is still set for May 31.
Legislators in September proposed an extension of the estate tax amnesty by two years as a form of relief for taxpayers. However, Finance Undersecretary Antonette C. Tionko has said that the Department of Finance would prefer to gauge the impact of the program before declaring an extension.
Republic Act No. 11213 or the Tax Amnesty Act was signed in February 2019 but drew a partial veto from President Rodrigo R. Duterte, who opposed a general amnesty without lifting bank secrecy laws.
The amnesty on delinquencies covers all national internal revenue taxes such as income tax, withholding tax, capital gains tax, donor’s tax, value-added tax, other forms of percentage tax, excise tax and documentary stamp tax running back to 2017.
The estate tax amnesty provides for a fixed 6% tax rate of the total net estate of persons who died on or before Dec. 31, 2017, and grants immunity from all other estate taxes and penalties incurred in the past.
“The grant of estate tax amnesty will unlock assets still registered under unsettled estates so that these may be used for commercial or economic activities that would create investment, jobs, and taxable transactions,” the NTRC said.
Granting relief through tax amnesty forms part of the government’s Tax Reform Program, along with measures seeking to increase taxes on “sin” products, fuel and other goods and services, as well as lowering corporate and personal income taxes. — Beatrice M. Laforga