By Zinnia B.
Dela Peña (The Philippine Star) | Updated January 31, 2013 - 12:00am
MANILA,
Philippines - The Department of Finance wants to increase estate tax collection
to P50 billion annually given a buoyant property market and record low interest
rates which have jacked up property values.
In a briefing
yesterday, Finance Secretary said the agency is closely working with the Bureau
of Internal Revenue and sees the need to revisit the estate tax to increase
government revenues.
The estate
tax is defined by the BIR as the tax on the right of the deceased person to
transmit his/her estate to his/her lawful heirs and beneficiaries at the time
of death. It is not a property tax but a tax levied on the privilege of
transferring property upon the death of the owner.
Purisima said
it was an ambitious target considering that collections from estate taxes
amount to only P850 million to P1
billion.
“If you
analyze estate taxes collected by the government, it’s always around P850
million to P1 billion. Over the past many years, asset prices have increased
just from that you would expect estate taxes should increase. Our long-term
goal is to bring that number up to about P50 billion annually. We will closely monitor with the BIR and its
offices to try to meet this target,” Purisima said.
“This is an
ambitious target. It’s a big jump. We
don’t expect that to happen overnight.
But we will closely monitor this number.
If we success that’s another 0.5 percent of GDP (gross domestic product),”
Purisima said when asked about the timetable for the plan.
The estate
tax accounts for less than one percent of the BIR’s total revenues.
The executor
or administrator or any of the legal heirs of the decedent is required to file
the estate tax return where through exempt from estate tax, the gross value of
the estate exceeds P200,000 and where regardless of the gross value, the estate
consists of registrable property, motor vehicle, share of stocks or other
similar property for a clearance from the BIR is required as a condition
precedent for the transfer of ownership.
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