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House body approves estate tax amnesty

  • Written by Ryan Ponce Pacpaco
  • Published in Nation
  • Read: 182

THE House committee on ways and means approved yesterday a proposed law seeking to grant tax amnesty for all unpaid estate taxes upon the effectivity of the proposed law.

“The estate tax amnesty instantly resolves the triple deadlock we now have in non-compliance, low tax collection, and idle properties. Even while dealing with bereavement, the heirs are faced with the obligations of complying with the filing of tax returns and substantial payments within a small window of time. This commonly results in non-compliance, which, accordingly leads to idle properties and low tax collection”, said Deputy Speaker and Marikina City Rep. Miro Quimbo, author of House Bill (HB) No. 3010.
   
The complicated scheme of filing the estate tax is also a disincentive for the heirs to comply. The failure in filing estate tax within a timeframe also subjects the taxpayer to penalties and interests under the NIRC.
   
The estate tax amnesty bill provides for a lowering of the tax rate to six percent (6%) of the gross value of the property, making it equal to the current rate of tax on capital gains.
   
The proposed rate under the estate tax amnesty bill effectively lowers the current tax rate of 20% in the National Internal Revenue Code (NIRC). The heirs are also given a year from the passage of the law to avail of the amnesty.
   
Quimbo said that based on simulation of the rates in HB 3010, the tax rate for a net estate of thirteen million (P13,000,000) and below, is even lower than capital gains tax.
   
The panel is set to consolidate the two estate tax amnesty bills -- HB No. 3010, authored by Quimbo and HB No. 1889 authored by Deputy Majority Leader Arthur Defensor, Jr.
   
“I thank the Committee on Ways and Means, under Chairman Dakila Cua, for their swift and decisive action on the estate tax amnesty bill.
   
The Committee recognized the long-drawn out and valid complaint of family members. The Committee also recognized the wisdom of providing a mechanism to collect more revenues for the coffers of the government. I am positive that my colleagues in the lower house will also throw their support behind this measure once it reaches the plenary,” Quimbo said.
   
Quimbo also authored HB No. 20, which seeks to adjust tax brackets to inflation, and HB No. 2379 which seeks to lower corporate income tax from 30% to 25%.
   
HB 3010 is part of the third phase of Quimbo’s three-phased tax reform proposal.