Vol. XXI, No. 167 [ Business World Online ]
Thursday, March 27, 2008 | MANILA, PHILIPPINES
THE BUREAU of Internal Revenue (BIR) is hoping to collect an additional P1 billion after finding legal basis to declare that a just-expired tax amnesty should instead end on May 5.
BIR Commissioner Lilian B. Hefti said the agency had already drafted a department order for Finance Secretary Margarito B. Teves’s signature.
Mr. Teves, who is currently chairing the Philippines Development Forum in Clark, Pampanga, yesterday said he had yet to rule on the BIR draft.
"I have not fully read the order. The gist is that they are willing to extend the deadline. I should be able to work on it on or before Friday," he said.
Questions over the effectivity of the Tax Amnesty Law of 2007 came up when consulting firm Isla Lipana & Co. raised compliance issues based on the Administrative Code.
"We tried to find out if there was a way to reset because we had clients who were asking for assistance at the last minute. There are also some taxpayers who are not aware of the mechanics of the amnesty," said Tammy Lipana, chairman and senior partner at Isla Lipana.
In seeking clarification from the BIR, the firm said that while the law’s implementing rules and regulations were published in national newspapers on August 21, 2007, the same were only submitted to the Office of the National Administrative Register on October 23 of the same year.
Under the Administrative Code, a law becomes effective only 15 days after both publication and the submission requirements have been fulfilled. Isla Lipana said the Tax Amnesty Law’s effectivity should have been from November 7, 2007 to May 5, 2008.
The BIR collected P4.2 billion worth of amnesty fees from September 5 to March 6. While collections lagged for most of the amnesty period, Ms. Hefti said more than P2 billion worth of payments came in towards the end of February until the program ended on March 6.
Given historical data and Filipinos’ tendency to wait for the last minute before making a move, Ms. Hefti said she was "hopeful" that the agency would be able to add P1 billion to the amnesty take.
Ms. Lipana said the government should act quickly to reset the deadline, and intensify its public information campaign if it is to generate additional revenues.
The Tax Amnesty Law is a one-time reprieve allowing taxpayers to erase deficiencies in income, excise, documentary stamp, estate, value-added, and other percentage taxes up to December 31, 2005.
A taxpayer seeking to avail of the amnesty is required to submit a statement of assets and liabilities, and pay an amnesty fee equivalent to 5% of his total net worth as of December 31, 2005.
Based on to the law, P400 million of the amnesty proceeds will be used to develop an information technology program which will allow the Finance department and the BIR to access information from the Land Registration Authority, Trade department, Securities and Exchange Commission, Land Transportation Office. The data will be used for "lifestyle" checks. — Anna Barbara L. Lorenzo
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