^

Duterte vetoes tax amnesty

Mary Grace Padin (The Philippine Star) - February 18, 2019 - 12:00am

MANILA, Philippines — Duterte has vetoed a provision of the Tax Amnesty Bill which grants a general amnesty program for taxpayers with unsettled obligations, the Department of Finance (DOF) said over the weekend. 

In a text message to reporters, Finance Secretary Carlos Dominguez said Duterte has line – vetoed the general tax amnesty provisions under the Tax Amnesty Act of 2019 due to Congress’ rejection of measures to relax the Bank Secrecy Law and improve processes in the exchange of information.

“The President was constrained to veto the portion of the law covering the general amnesty because of the lack of provisions breaking the walls of bank secrecy, setting the framework for complying with international standards on exchange of information, and other safeguards against those who abuse by declaring untruthful assets or net worth,” Dominguez said.

Dominguez earlier said relaxing the bank secrecy rules and improving the automatic exchange of information are deemed necessary for the tax amnesty program to be effectively implemented.

According to DOF estimates, the general amnesty program would have generated the government only P6.8 billion in additional revenues, lower than the P13.6 billion original projection due to the absence of provisions on bank secrecy and the automatic exchange of information.

 Dominguez said this would further be diminished and  offset by enforcement activities, leading to an indirect revenue loss of around P53 billion had the general tax amnesty provision not been vetoed.

Moreover, Dominguez said the provisions on bank secrecy and the automatic exchange of information could have also raised P76.6 billion in direct and indirect revenues in the next five years.

With the removal of general amnesty, Dominguez said only the estate tax amnesty program and the amnesty on delinquency taxed remain to be implemented.

However, he said Duterte has vetoed some specific provisions stating that there will be a one-time settlement of estates for properties under multiple unsettled estates.

“He explains that the six percent rate at property values at the time of death is ‘more than fair imposition already’--it is already quite generous. To allow this one-time settlement of unsettled estates shall only eat up on the expected revenues from this measure. We see that it is also unfair to those that have properly settled their estates early and have paid at each stage of transfer,” Dominguez said.

Duterte also vetoed the provision on the presumption of correctness of estate tax amnesty returns.

“The President has always had a strong stance against wrongdoers—thus, accountability is very important in this grant. When one avails of the amnesty, the government should be able to verify his declarations,” Dominguez said.

Nevertheless, the DOF welcomed the passage of the Tax Amnesty Act of 2019, which it said would allow Filipinos to free up properties that have long been estate-locked and to make good economic use of these properties.

The DOF said the law also allows delinquents with long-due liabilities and pending criminal cases to start anew.

“We hope that in availing of this amnesty—a very, very generous reprieve from the state, taxpayers would feel more encouraged to pay the right taxes, and be more empowered to be good taxpayers in the future,” the DOF said.

The finance chief also encouraged Congress to pass another general tax amnesty bill that contains the necessary provisions on bank secrecy and the automatic exchange of information.

“We will work with Congress to pass a General Tax Amnesty with the proper safeguards, such as lifting of bank secrecy provisions and the AEOI, if not in this Congress, then in the next. We shall work with them, like we always have, to have it passed immediately,” Dominguez said.

RODRIGO DUTERTE TAX AMNESTY BILL
Philstar
  • Latest
  • Trending
Latest
Recommended
Are you sure you want to log out?
X
Login

Philstar.com is one of the most vibrant, opinionated, discerning communities of readers on cyberspace. With your meaningful insights, help shape the stories that can shape the country. Sign up now!

FORGOT PASSWORD?
SIGN IN
or sign in with