Tax expert suggests amnesty plan to settle delinquent account

CEBU, Philippines - The government is being urged to seriously consider tax amnesty and allow legal compromises to settle all pending delinquent accounts.

This according to tax expert Raymond Abrea who said that instead of relying on the traditional audit of the Bureau of Internal Revenue, the Center for Strategic Reforms of the Philippines (CSR Philippines), where he is the founding president, is promoting a "Seal of Honesty" certification program with Integrity Initiative to help promote a culture of honesty and integrity in paying taxes.

"Rather than penalties, we need to focus on giving incentives or recognitions to honest taxpayers thus encouraging voluntary compliance which contributes 97 percent of our total tax collections," Abrea, president and chief strategy officer of Abrea Consulting Group, told The FREEMAN.

Last week, CSR Philippines signed a memorandum of understanding with the BIR and Department of Trade and Industry to help the development of small and medium enterprise sector and help taxpayers pay the right taxes.

Review

Earlier, Finance Secretary Carlos Dominguez said the government is reviewing tax incentives for businesses in its bid to generate more revenues to offset the expected income losses from the reduction of income tax rates.

"We are reviewing the tax incentives that were so casually given out in the past. Many of the businesses are enjoying incentives they do not really need," Dominguez said in a statement.

Other sources

To make up for the revenue loss from lower income tax rates – estimated at P174 billion – Dominguez said the government would have to raise revenues from other sources.

These measures include reviewing the tax perks for businesses and some exemptions to the value-added tax, indexing oil excise tax rates to inflation, and indexing and reforming property valuations.

Dominguez added that VAT exemptions enjoyed by the poor would not be removed.

"We are, likewise, reviewing the exemptions to VAT. We hope our people will understand that it is preferable to withdraw certain exemptions than to raise the VAT rate," he said.

The government is also considering taxes on unhealthy food items to help raise additional funds and promote public health.

Next month, the Duterte administration is expected to present its comprehensive tax reform package to Congress which is expected to be legislated and signed into law by Malacañang.

The Duterte administration plans to reduce corporate and personal income tax rates from 32 percent to 25 percent under the tax reform proposal. (FREEMAN)