From April 24, 2019, taxpayers with long-due liabilities and pending criminal cases are enjoying the benefits of the tax amnesty on delinquencies, except the vetoed general amnesty provision due to lack of safeguards.
Republic Act (RA) No. 11213 or the Tax Amnesty Act of 2019 was signed by President Duterte last February 14, but the chief executive vetoed the general tax amnesty provision covering those who failed to pay correct taxes in 2017 and prior years. This decision rooted from pointing out the lifting of bank secrecy for tax purposes as well as automatic exchange of information in order to strengthen enforcement against tax evasion. The said general amnesty was supposed to cover all unpaid internal revenue taxes, except customs and import duties.
The law will cover all national taxes—capital gains tax, documentary stamp tax, donor’s tax, excise tax, income tax, percentage tax, value-added tax (VAT), and withholding tax—for the taxable years 2017 and previous years.
The new law’s set of guidelines, Revenue Regulations (RR) 4-2019 dated April 5, signed by Finance Secretary Carlos G. Dominguez III and Internal Revenue Commissioner Caesar R. Dulay, was published in a newspaper of general circulation Tuesday; as such, it will take effect fifteen (15) days later or on April 24.
According to the guidelines of this act, all persons, whether natural or juridical, with internal revenue tax liabilities covering taxable year 2017 and prior years, may avail of Tax Amnesty of Delinquencies within one (1) year from the effectivity of the Regulations, under any of the following instances:
- Delinquent accounts with application for compromise settlement either on the basis of a doubtful validity of the assessment or financial incapacity of the taxpayer, whether the same was denied by or still pending with the Regional Evaluation Board or National Evaluation Board, as the case may be, on or before the effectivity of the regulation.
- Delinquent withholding tax liabilities arising from non-withholding of tax.
- Delinquent estate tax liabilities.
- With pending criminal cases with the DOJ/Prosecutor’s Office or the courts for tax evasion and other criminal offenses under Chapter II of Title X and Section 275 of the Tax Code, as amended, with or without assessments duly issued.
- With final and executory judgment by the courts on or before the effectivity of these Regulations; and
- Withholding tax liabilities of withholding agents arising from their failure to remit withheld taxes.
Tax amnesty ranges to 40% to 100% of the basic tax assessed depending on the case of delinquencies. For better understanding please visit bir.gov.ph for further discussions about Tax Amnesty.