The House Committee on Ways and Means approved Monday (August 24) a bill seeking to grant a general tax amnesty on all unpaid revenue taxes for taxable years 2018 and prior years to availing taxpayers based on total assets declared in their Statement of Total Assets (STA), as of December 31, 2018.

After almost one hour of virtual deliberations, the House panel, chaired by Albay 2nd District Rep. Joey Salceda approved the version of the bill presented by the Department of Finance (DOF) and decided to incorporate some amendments under the proposed General Tax Amnesty Act.

The amendments were authored by Reps. Estrellita B. Suansing of Nueva Ecija 2nd District; Horacio P. Suansing Jr. of Sultan Kudarat 2nd District, Sharon Garin of AAMBIS-OWA partylist, and Kristine Singson-Meehan of Ilocos Sur 2nd District.

The bill seeks to grant a general tax amnesty for all unpaid internal revenue taxes to help cleanse, organize, and improve the Bureau of Internal Revenue’s database. It specifically amends Section 6 of the National Internal Revenue Code of 1997, as amended.

It was Garin who moved for "the substitution of a bill currently based on the proposal of the DOF, instead of the previous report of the technical working group (TWG) with amendments.” Garin’s motion was amended by Salceda who called for the inclusion of Meehan’s amendment

“We are substituting the DOF version, subject to the Meehan version,” Salceda said.

The measure provides that a general tax amnesty shall be granted, which shall cover all paid National Internal Revenue taxes except estate taxes, collected by the Bureau of Internal Revenue (BIR) for taxable year 2018 and prior years, with or without assessments duly issued therefor.

The amnesty may be obtained through the filing with the appropriate office of the BIR, as sworn general tax amnesty return accompanied by a notarized statement of total assets as of December 31, 2018. It also calls for the payment of a tax amnesty rate of three percent based on the taxpayer’s total assets, as of December 31, 2018, within one year from the effectivity of the revenue regulations covering such provision.

Despite the DOF’s “reservation”, the Salceda panel decided to retain a provision pushed by Singson-Meehan, which exempts qualified taxpayers from audit and investigation of income tax, VAT, excise tax and percentage tax returns by paying at least 20 percent more of the income, VAT, excise and percentage taxes paid, as the case may be during the previous taxable year.

“It will remain an option subject to the proviso under Section 4 because I cannot see the logic being propounded by the DOF (on) how it could be so different. I think it is so common sense that it refers to and therefore it is up to the taxpayer to take the risk,” Salceda said.

Singson-Meehan said her proposal seeks "to increase tax collection with the least administrative cost and reduce fiscal leakages by encouraging voluntary tax compliance without compromising the revenue collection generated from audit/investigation and enforcement."

The House panel-approved bill provides that those who have availed and paid the general tax amnesty shall be entitled to the following immunities and privileges:

• With respect to the years covered by the tax amnesty, the taxpayer shall be immune from the payment of taxes, and from all appurtenant civil, criminal, and administrative case and penalties under the NIRC of 1996, as amended, arising from the failure to pay any and all internal revenue taxes for taxable year 2018 and prior years and from such other investigations or suits insofar as they relate to the assets, liabilities, net worth, and internal revenue taxes that are subject of the tax amnesty.

• Any information or data contained in, derived from, or provided by a taxpayer in the tax amnesty return and statement of total assets including all appurtenant shall be confidential in nature and shall not be used in any investigation or prosecution before any judicial, quasi-judicial, and administrative bodies. However, the taxpayer may use this as a defense, whenever appropriate, in cases brought against the taxpayer

• The books of accounts and other records of the taxpayer for the years covered by the tax amnesty availed of shall not be examined by the BIR, provided that the Commissioner of Internal Revenue may authorize in writing the examination of said books of accounts and other records to verify the validity or correctness of a claim for any tax refund, tax credit, tax incentives, or exceptions under existing laws.

The measure provides that upon full compliance with al the conditions set forth in the proposed Act ad payment of the corresponding amnesty tax, the amnesty granted under the proposed Act shall become final and irrevocable.

Under the bill, the following are excused from availing themselves of the general tax amnesty:

• withholding tax agents who withheld taxes but failed to remit to the BIR;

• taxpayers with cases pending in appropriate courts;

• felonies of frauds, legal exactions and transactions, and malversation of public funds and property under Chapter III and IV of the Revised Penal Code;

• tax cases that have become final and executor;

• delinquencies and assessments that have become final and executory; and

• all cases falling under estate tax amnesty and the tax amnesty on delinquencies under Republic Act No. 11213.

The bill penalizes any officer, owner, agency, manager, director or officer-in-charge of a reporting financial institution, being required in writing by the BIR Commissioner, who willfully refuses to supply the required information with a penalty of fine ranging from P50,000 to P100,000, or two to five year imprisonment, or both.

Those who shall be found to have committed any breach of confidentiality within the purview of the proposed Act shall be subject to a fine of not less than P500,000 but not more than P1 million, or suffer three to eight years of imprisonment.

The bill provides that the Secretary of Finance, in coordination with the BIR Commissioner, shall promulgate and publish the necessary rules and regulations within 90 days from the effectivity of the proposed Act.