By Zinnia B. Dela Peña (The Philippine
Star) | Updated September 2, 2013 - 12:00am
MANILA, Philippines - The Bureau of
Internal Revenue (BIR) reminded those
who have been planning out their wealth for future distribution to their spouse
or children to make sure that their heirs pay the estate tax or face tax
evasion charges.
BIR commissioner Kim Henares noted
that some individuals try to evade estate taxes by selling their properties to
their immediate family. By doing this,
the surviving entities would only need to pay the capital gains tax.
Henares said the BIR would check
whether the heirs have the financial capacity to purchase the property or asset
from their parents.
She said the recipients must have the
means to shell out money for the settlement of the appropriate taxes.
The transfer of properties of a deceased
person requires the payment of estate taxes to the BIR. If the estate includes
real property, the heir must likewise pay the local tax on transfer of real
property to the local government where the said property is located.
The estate tax is a tax on the right
of the deceased person to transfer his/her estate to his/her lawful heirs and
beneficiaries at the time of death.
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Under the law, the administrator or
heirs of deceased persons need to file an estate tax return where the gross
value of the estate exceeds P200,000 and where the estate consists of
registrable property, motor vehicle, share of stocks and other similar property
as a precondition for the transfer of ownership.
The estate tax return shall be filed
within six months from the time of death. However, the BIR, may in meritorious
cases, grant extension not exceeding 30 days.
Henares said the government’s goal is
to boost estate tax collections to around P50 billion by 2016 from the current
P1 billion.
To achieve this, the BIR has mandated
banks to submit statement of accounts of deceased persons in the past five
years to determine whether these financial institutions have been conniving
with the heirs by allowing them to withdraw money from the deceased’s account.
Henares pointed out that the bank
secrecy law is automatically lifted once a person dies, thus allowing the
government to look into the bank accounts of dead people.
Banks found to be colluding with the
heirs of the dead would be held criminally liable, she said.
Henares said the BIR is also closely
coordinating with the National Statistics Office to check the number of
registered deaths.
Records show that on the average, the
number of estate tax returns filed correspond only to less than 10 percent of
the total number of deaths registered with the NSO.
Some lawmakers had proposed the
abolition of the estate tax years ago on the ground that it unfairly punishes
frugality, reduces wages and raises little revenue. This, however, was rejected
because the government sees estate tax as a source of potential revenue.
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