THE Bureau of Internal Revenue (BIR) considers the new tax amnesty “a gift” to heirs of deceased property owners and delinquent taxpayers because this will settle their liabilities and they can enjoy their inheritance.
BIR 13 Chief Legal Officer Hector Baronda said that Republic Act (RA) 11213 was approved by President Rodrigo Duterte last March 5, and the implementing rules and regulations (IRR) will be completed not later than June 5.
Baronda said that because Duterte vetoed the general amnesty provision, only unpaid estate taxes and delinquent taxes are covered by the amnesty.
Baronda added that taxpayers can avail themselves of the estate tax amnesty two years from the start of the IRR, while they can avail themselves of the the delinquent tax amnesty one year from the day the IRR takes effect.
He said that before RA 11213 was passed, if a taxpayer had an estate tax due of P1 million that was unpaid for one year, he had to pay a 25-percent surcharge equivalent to P250,000, 20 percent interest equivalent to P200,000, plus a compromise penalty. This will reach about P1.8 million to P2 million.
But with the tax amnesty, the concerned taxpayer will only pay 40 percent equivalent to P400,000.
He said that if the owner of a real property died in 1940, the heirs will just pay six percent from the time of death, so the heirs can transfer ownership of the property.
“The heirs can deduct from the six percent tax whatever expenses before death like medical and funeral expenses. If in the computation there is no more tax payable, they just pay the minimum fee of P5,000. This is what they call net estate tax,” Baronda said.
He noted that the problem begins when heirs fail to report the death of a parent within six months and pay the estate tax. This worsens when the other parent passes away. When the heirs decide to divide the inheritance, they cannot secure a certificate authorizing registration until all liabilities are paid.
He also said that those who have criminal cases of tax evasion in court or at the city prosecutor’s office can still avail themselves of the amnesty by paying 60 percent of their liability.
BIR 13 Director Eduardo Pagulayan Jr. said they will conduct a massive information drive to make the public aware of the new tax amnesty law while waiting for the IRR.
Pagulayan believes the public will strongly respond to the tax amnesty, so that after the amnesty period, they can clean up their records of unpaid estate and delinquent taxes.