BIR to finalize estate tax amnesty rules by May

MANILA, Philippines — The Bureau of Internal Revenue is expecting to finalize and publish by May the implementing rules and regulations (IRR) on the estate tax amnesty program, a ranking BIR official said.

In a recent interview, BIR Deputy Commissioner and spokesperson Marissa Cabreros said the agency has finished drafting the revenue regulations (RR) for the estate tax amnesty provisions under Republic Act 11213 or the Tax Amnesty Law.

She said the RR would most likely be finalized by May, after it undergoes the consultation process with stakeholders.

“(The draft RR) is already finished. After Holy Week, we’ll have it uploaded for comments,” Cabreros said. “Most probably it will become effective by May.”

According to Cabreros, the BIR has until June 3 to complete all the guidelines for the Tax Amnesty Law. However, she said the bureau would not wait until the deadline if the IRRs could be done earlier.

The first IRR, or Revenue Regulations No. 4-2019 involving the tax amnesty on delinquencies was already published last April 5.

“The (RR on) delinquency came first because that’s easier and straightforward. The tax amnesty on estate is slightly complicated in the sense that there’s a lot of implication. It involves several transfers of property so it’s more on completeness of the reporting and proper valuation,” she said.

The application period for the estate tax amnesty program will start on April 24, 15 days after the publication of RR No. 4.

Cabreros said interested applicants for the amnesty program on estate taxes could already start getting their delinquency verification forms from the BIR before then.

“Even before April 24…after Holy Week, they can already start getting their delinquency verification form from the district or LTS (large taxpayer service) that they are registered with. That document will show how much their delinquencies are, and that will be the basis to apply the tax amnesty rate,” the BIR official said.

According to estimates from the Department of Finance, RA 11213 is projected to raise additional revenue amounting to P27.541 billion.

Bulk or P21.26 billion of this amount is estimated to come from the tax amnesty program for delinquencies, while the remaining P6.28 billion is seen to be captured through the estate tax amnesty program.

However, Joven said the expected revenues from the law is 56.63 percent lower than the P63.5 billion initially expected by the DOF under its original proposal.

This was due to the absence of general tax amnesty provisions, which were vetoed by President Duterte due to lack of safety measures, namely the lifting of bank secrecy and automatic exchange of information.

Because of this, the BIR trimmed down its 2019 collection target to P2.271 trillion from the previous goal of P2.33 trillion.

The country’s economic managers also decided to cut the government’s revenue program to P3.15 trillion for 2019 from the previous goal of P3.208 trillion.