Blogging The Tax Amnesty Hearing
… or, to be more precise, at today’s Oversight Committee hearing at the House on the proposed implementing rules and regulations (IRR) of Republic Act 9480, the 2007 Tax Amnesty Law, which was recently allowed by President Gloria Macapagal Arroyo to lapse into law. It will take effect on June 16, 2007.
It’s 9:20 AM, and the meeting room is now occupied with representatives from the finance and internal revenue departments, as well as private sector guys such as myself. The members of the committee, chaired by Quezon province representative Danilo Suarez, have yet to appear.
Early scuttlebutt? The finance boys want the IRR to hew as close as possible to the letter of the law, while the taxmen want the IRR to help maximize the collection of the proceeds of this amnesty.
What is the scope of this tax amnesty law? According to the handouts produced by the finance department, it covers the following:
a. Those which are considered delinquent wherein assessments by the Bureau of Internal Revenue (BIR) have become final and executory;
b. Cases for which the BIR has issued Final Assessment Notices (FANs) but there are pending protests on these assessments, and;
c. Cases pending in the courts, including those pending in the Supreme Court for final decision but with favorable decisions to the BIR rendered by the lower courts.
9:40 AM. Rep. Suarez is in the hall, as well as the Grand Old Man of the House himself, Negros Oriental representative Herminio Teves. Rep. Hermilando Mandanas of Batangas is also present. The hearing was finally called to order at 9:50 AM.
Rep. Suarez put it on record that the tax amnesty law as enacted is not the House’s version of the same act, and that he personally recommended to the President to veto the same. He also admitted, however, that had the law been vetoed, the 14th Congress, especially an opposition-dominated Senate, may not agree to a similar measure. He finally said that the ultimate purpose of the tax amnesty law is not to collect additional revenues but to enlarge the taxpayer base, anywhere between 100,000 to 200,00o persons.
Rep. Suarez also hoped that a bill now pending in the Senate, which will allow finance, tax, and customs officials to file complaints against erring taxpayers directly with the Court of Tax Appeals, instead of filing it first with the justice department as is the case today, will pass muster today in that chamber.
Rep. Suarez also disclosed that part of the tax mapping effort is to correlate registration data from the Philippines’ motor vehicle department, land tax records, arrival and departure records from the immigration department, in order to gain a better picture of the Philippine taxpayer base.
Rep. Suarez revealed that the Senate’s version of the tax amnesty law is in some respects more liberal than the House’s bill. For example, he said that the House’s version of the law requires taxpayers with pending court cases who want to avail of the amnesty to pay 20 percent of the amount demanded by the government plus the five percent of net worth as required of everybody else. The Senate’s version did away with that.
The BIR proposes that the following taxpayers be disqualified from enjoying the tax amnesty’s benefits:
a. Delinquent accounts and/or those who have been issued Final Assessment Notices (FANs) by the Commissioner of Internal Revenue;
b. Tax cases for which FANs have been issued but with pending protests thereon;
c. Cases pending in the Department of Justice and in the courts, including those in the Supreme Court but with favorable decisions to the BIR by the lower courts, and;
d. Taxpayers who have understated the amount of net worth by 30 percent or more.
An observer noted that this proposed exclusion list enlarges the list of those disqualified as enumerated in the law itself.
The BIR, in its proposed IRR, wants to pre-qualify individuals who want to enjoy the benefits of the tax amnesty, which lead a private sector representative to comment that the information supplied by an applicant may be used against him if his application is denied and thus discourage more potential taxpayers to come out of the woodwork. This led Rep. Suarez to urge the BIR officials present to be more lenient and be as liberal as possible in approving amnesty applications within the bounds of the law, to the applause of the rest.
Rep. Suarez disclosed that the tax amnesty enacted by the late President Ferdinand Marcos in 1972 was the most successful effort in recent times, netting the government 12 percent of its revenues for that year.
