Bill extending period for availing of Estate Tax Amnesty sponsored in Senate

The bill extending the availing period for the Estate Tax Amnesty was sponsored in the Senate on Tuesday.

Senate Ways and Means chairperson Pia Cayetano sponsored Senate Bill 2208 which seeks to amend Section 6 of Republic Act 11213 or the Tax Amnesty Act.

In her sponsorship speech, Cayetano said the COVID-19 pandemic hit the country 10 months after the implementation of RA 11213 which affected  applications for the tax amnesty.

“Due to the strict travel restrictions and stalled economic activities in the time of COVID-19, many Filipinos have been unable to file their tax returns and settle their tax obligations. And the community quarantines imposed in different parts of the country prevented taxpayers from availing of the tax amnesty mandated by law,” she said.

RA 11213 allowed taxpayers a one-time opportunity to settle their tax obligations, including an Estate Tax Amnesty Program.

The law also allowed heirs of estate owners who died on or before December 31, 2017 and those whose estate taxes have not been paid or have accrued as of December 31, 2017 to file their estate tax returns from June 15, 2019 until June 14, 2021.

SB 11213 seeks to extend the period to avail of the estate tax amnesty from June 15, 2021 until June 14, 2023.

“[T]he Committee deems it appropriate that we extend the period of availment of the estate tax amnesty for another two years, in order to allow Filipinos who have not been able to affordably settle their outstanding tax liabilities during the period, to do so. At the same time, extending the program will also provide the government with additional revenues that will fund priority programs for the benefit of the people,” she said.

Cayetano cited data from the Bureau of Internal Revenue which showed that the collected revenue from the estate tax amnesty program was only around P2.5 billion.

This was lower than the expected additional revenue of P6.28 billion.

The bill also introduces an amendment that removes the requirement for proof of settlement to avail of the estate tax amnesty.

“During the hearing, it was pointed out by various resource persons, that one main reason for non-availment of the estate tax amnesty is the fact that the heirs could not produce 'proof of settlement,' which is required in the Tax Amnesty Act. The Committee has decided, after hearing all the experts, to delete this requirement given that under the laws of succession, ownership is transmitted upon the death of the decedent, whether or not it has been supported by any judicial or extrajudicial form,” Cayetano said.

Moreover, Cayetano said the measure will help the economy recover as Estate Tax Amnesty will allow access to previously locked assets.

During the committee hearing on the said measure, the Department of Finance assured the Senate that it will support the passage of the bill.

The DOF’s support will prevent President Rodrigo Duterte’s veto of the measure.

In September, the House of Representatives approved HB 7068 on third and final reading, which seeks to extend the period within which to avail of estate tax amnesty from the current two years to four.

All tax-related measures should emanate from the House of Representatives before the Senate plenary can act on it.

After the Senate passes the measure on third and final reading, a bicameral conference committee will be formed to reconcile the disagreeing provisions of the House and Senate versions. — DVM, GMA News