House panel okays Romualdez couple bill on extension of estate tax amnesty

Yedda Marie K. Romualdez
Tingog party-list Rep. Yedda Marie Romualdez

A HOUSE panel on Monday approved a proposed law filed by Majority Leader and Leyte Rep. Martin Romualdez and his wife, Tingog party-list Rep. Yedda Marie Romualdez, seeking to extend the availment period of estate tax amnesty to accommodate more taxpayers.

During the virtual hearing, the House committee on ways and means chaired by Albay Rep. Joey Sarte Salceda approved House Bill (HB) 7068 of the Romualdez couple and co-authored by House Deputy Majority Leader and Zamboanga Sibugay Rep. Wilter "Sharky" Palma II to amend Republic Act (RA) No.11213 or the 2019 Tax Amnesty Act for two more years.

The Romualdezes and Palma said HB 7068 will provide economic relief for Filipinos in this time of coronavirus disease-19 (COVID) pandemic.

They said amending RA 11213 will enable those who want to take advantage of this program ample time to recoup their resources and get back on their feet so they can still apply and pay their estate tax dues.

AAMBIS-OWA Party-List Rep. Sharon Garin sponsored the measure that would give delinquent taxpayers more time to settle their liabilities by extending the period of the estate tax amnesty’s availment.

It was Baguio City Rep. Mark Go who quickly moved for the passage of the measure after Bureau of Internal Revenue (BIR) Assistant Secretary Elenita Quimosing bared during the hearing that the collection targets set by the Department of Finance (DOF) for RA No.11213 was still far from being fulfilled.

Quimosing said the total collection from 2019 to June 2020 for tax amnesties has reached P4.75 billion from 23,911 tax amnesty availers. She said P3.4 billion came from the tax amnesty on delinquencies while P1.3 billion from estate tax amnesty of the P4.75 billion collection.

But Quimosing admitted that the P4.75 billion collection is far from the target set by the Department of Finance (DoF).

"For the tax amnesty on delinquencies, the total collection from 2019 until June of 2020 is P3.403 billion. And then for estate tax amnesty, it's P1.362 billion, for a total of P4.765 billion. And the total availers (were) 23,911 for both," Quimosing told the panel.

"The target for the estate tax, as set by the DOF, is P6 billion. And the target for the tax amnesty on delinquencies is P21 billion. Medyo malayo pa po because of the situation we are in now," Quimosing explained.

RA 11213 was approved by President Rodrigo Duterte last February 14, 2019. Under this law, the government provides the taxpayers a one-time opportunity to settle estate tax obligations through an estate tax amnesty program that gives reasonable tax relief to estates with outstanding estate tax liabilities.

The law provides that taxpayers who avail of the estate tax amnesty enjoy immunity from the payment of estate taxes, civil, criminal, and administrative cases and penalties. Failure to avail of the estate tax amnesty means that previously suspended late estate tax penalties will be applicable, and the costs to transfer estates will be very costly.

Majority Leader Martin Romualdez said this is the reason why everyone who has outstanding estate tax liabilities as of December 31, 2017 is encouraged to take advantage of this excellent and rare opportunity offered by the government.

The estate tax amnesty covers the estate of decedents who died on or before December 31, 2017, with or without assessments duly issued therefor, whose estate taxes have remained unpaid or have accrued as of December 31, 2017. Under the law, the executor or administrator of the estate, or if there is executor or administrator appointed, the legal heirs, transferees or beneficiaries, who wish to avail of the estate tax amnesty shall do so within two years from the effectivity of the implementing rules and regulations (IRR) of RA 11213.

The bill amends Section 6 of the Tax Amnesty Act of 2019 to read, "The executor or administrator of the estate, or if there is no executor or administrator appointed, the legal heirs, transferees or beneficiaries, who wish to avail of the Estate Tax Amnesty shall within four (4) years from the effectivity of the Implementing Rules and Regulations (IRR) of this Act, file with the Revenue District Office of the Bureau of Internal Revenue, which has jurisdiction over the last residence of the decedent, a sworn Estate Tax Amnesty Return, in such forms as may be prescribed in the IRR."

According to the existing language in RA No. 11213, it only prescribes an availment period of two years.

"Under this law, the government provides the taxpayers a one-time opportunity to settle estate tax obligations through an estate tax amnesty program that gives reasonable tax relief to estates with outstanding estate tax liabilities. Taxpayers who avail of the estate tax amnesty enjoy immunity from the payment of estate taxes, civil, criminal, and administrative cases and penalties," the authors pointed out.

"It's just unfortunate that the Philippines is not spared from the ill effects of the COVID-19 pandemic, wherein many people lost their jobs and folded up their businesses. Most economic activities were stalled.

The people lost precious period of time and possible sources of income in order to avail of this tax amnesty program of the government," they noted.

"While the COVID-19 pandemic still persists, people will have extreme difficulty in paying their taxes much more in settling their estate tax dues even with this tax amnesty program," they said.

The availment period extension "will enable those who want to take advantage of this program ample time to recoup their resources and get back on their feet so they can still apply and pay their estate tax dues. This will also provide economic relief for many Filipinos at this time of crisis," the authors stressed.