P80-B delinquency in BIR books eyed for amnesty.
Finance Undersecretary Mark Dennis Y.C. Joven revealed the tax delinquencies data filed under the BIR based on the research of the DOF, at the recent Tax Management Association of the Philip-pines Inc. (Tmap) general membership meeting at the Makati Diamond Residences.
'From our research, there's around P80 billion worth of delinquencies pending in the books of the BIR. And this is not moving, probably in the last decade or so, and if at all, it increases. We also have the BIR's batting average on tax evasion cases, which we know is not very good. So we needed a mechanism to ensure that we clear the dockets and free the time of BIR employees to proceed against really errant taxpayers and involving more recent cases,' Joven said.
He explained that although the entire P80 billion cannot be captured-as some of the taxpayers with delinquencies may no longer be located or the taxpayer may be deceased-the government would still benefit to the extent that it can collect whatever revenues it can to fund its programs.
'We won't be able to capture 100 percent. There's a percentage of it with a certain likelihood. Just like bad debt, there is only a portion that you can collect...but it's already big [and better than] not being able to collect it,' he added.
Joven pointed out that with the signing into law of the Tax Amnesty Act of 2019, delinquent taxpayers may be encouraged to apply for amnesty as this will help them start anew.
'The other key component of RA 11213 is the tax amnesty on delinquencies. The tax amnesty on delinquencies intends to wipe the slate clean for availing taxpayers. It also helps the government unclog administrative and judicial dockets of slow moving cases,' he said.
Earlier, the DOF pointed out that potential revenues from the implementation of the Tax Amnesty Act of 2019 are estimated at P27.54 billion, lower than the estimated potential revenues of P63.5 billion under its original amnesty proposal.
Joven explained that potential revenues from RA 11213 decreased to P27.54 billion due to the exclusion of the general tax amnesty, lifting of the bank-secrecy law and the automatic exchange of information (AEOI) provisions.
Under the original tax amnesty proposal of the DOF, which includes the said provisions, estimated revenue collections was seen to reach as high as P63.5 billion.
Meanwhile, the bicameral conference-approved bill, which only removed the provision on the lifting of the bank secrecy law and AEOI and retained the other provisions proposed by the DOF, was seen to generate an estimated P34.34 billion in revenues.
The DOF-proposed tax amnesty measure, which is under its Package 1B of the Comprehensive Tax Reform Program (CTRP), includes measures of an estate tax amnesty, which is estimated to generate P6.28 billion, general tax amnesty with P13.63 billion, tax amnesty on delinquencies with P27.16 billion, lifting of the bank-secrecy law for criminal cases, as well as the AEOI with P16.6 billion.
Joven explained that the DOF is confident the government eventually pass a general tax-amnesty measure with the proper safeguards, namely, the lifting of the bank-secrecy law, as well as the AEOI provisions.
It was earlier reported, that President Duterte partially vetoed the general amnesty provision under the Tax Amnesty Act of 2019, which was signed on February 14, retaining only the provisions on estate tax amnesty and the amnesty on delinquency taxes.
The signed measure, RA 11213, seeks to enhance revenue administration and collection by granting an amnesty on all unpaid internal revenue taxes imposed by the national government for taxable year 2017 and prior years. This is with respect to the estate tax and other internal revenue taxes and tax on delinquencies.