Wednesday, December 5, 2018
In the Philippines, House Bill (HB) 8554, the proposed "Tax Amnesty Act of 2018," was passed in the House of Representatives on November 20, while the Senate approved their own version of the bill as Senate Bill (S)B 2059 on November 19. The House's version was sponsored by House Ways and Means Committee Chairman Estrellita B. Suansing of the second district of Nueva Ecija, and the Senate's version was sponsored by Sen. Juan Edgardo "Sonny" Angara.
Both bills comprise three separate tax amnesty programs: an estate tax amnesty, a general tax amnesty and a tax amnesty on delinquencies. Taxpayers who avail themselves to any of the program protect themselves from the payment of taxes as well as any additional civil, criminal and administrative penalties under the National Internal Revenue Code (NIRC). Both bills provide under the estate tax amnesty program for an amnesty tax of 6% of the decedent's estate at the time of death for those that died in 2017 or earlier.
The bills differ in complexity on how they deal with the general tax amnesty. The House’s version is simpler, providing for an amnesty tax of 2% based on the taxpayer’s total assets as of December 31, 2017. In the Senate's version, the type of taxpayer becomes relevant to the amount of tax paid. For individuals, trusts and estates, the amnesty tax is 5% or P100,000, whichever is greater. For corporations, the amnesty tax is a flat rate of 5% as well as graduated amounts of minimum amnesty tax payments.
As for the tax amnesty on delinquencies, the House version provides that withholding agents are given the opportunity to settle their withholding tax obligations by paying 100% of the basic withholding tax deficiencies. This privilege is not available under the Senate version.
See Peaches Martinez-Aranas, Tax Amnesty Act: Senate vs. House versions, AtinitoNew.com, November 25, 2018.
Special thanks to Jim Hillhouse (Professional Legal Marketing (PLM, Inc.) for bringing this article to my attention.