DOF supports tax amnesty ‘in principle’ » Manila Bulletin Business

Manila Bulletin Philippines

Breaking News from the Nation's leading newspaper


Online Newspaper

Showbiz and Celebrity News

Sports News

World News
News Asia

DOF supports tax amnesty ‘in principle’


By Chino S. Leyco

The Department of Finance (DOF) is supporting the proposed measure aiming to lure individuals and corporations with outstanding tax liabilities to settle their obligations without fear of being slapped with criminal charges.

“We support it,” Finance Secretary Carlos G. Dominguez III told reporters when asked if the DOF supports House Bill No. 7105, or the tax amnesty proposal filed by Speaker Pantaleon D. Alvarez, Majority Leader Rodolfo C. Fariñas and Quirino Rep. Dakila Carlo E. Cua.

Once passed into law, HB-7105 will impose a flat eight percent tax on the net worth of tax delinquents for taxable year 2017, or P10,000 to P10 million, whichever is higher.

Individuals availing the tax amnesty will have immunity from civil, criminal, and administrative penalties.

Meanwhile, Finance Assistant Secretary Mark Dennis Y.C. Joven explained to reporters that the DOF supports the bill “in principle.”

“We support it not because we need the money at this point but because we want a complete database of taxpayers and their net worth level so that in the future it will be easier for us to collect more taxes in a more efficient manner,” Joven said.

But Joven added that an eight percent flat rate may be at the “high side,” citing the recent tax amnesty the government had was only at five percent.

“Based on historical amnesties, the last amnesty we had was a five percent amnesty on net worth and compliance was really low, so we need to consider that as well… probably not 8 percent,” the ranking finance official said.

During the last tax amnesty campaign, the national government only raised P5 billion, according to Joven.

“It is really small compared to Indonesia which essentially collected the entire Philippines GDP [gross domestic product] in VAT [value-added tax].. about $300 billion,” Joven said.

In July, 2016, Indonesia launched its ambitious tax amnesty program that lasted until March last year. About $366 billion worth of assets have been declared to state tax office during its eight month run covering 965,983 individuals.

But Dominguez said that the Philippines and Indonesia are in a different situation in terms of tax compliance.

“Part of the [Indonesian] goal was to bring back the money from abroad. We think that Filipinos are not holding their dollars abroad I am sure most of them buy ROP [Republic of the Philippines] bonds,” Dominguez said.

“But of course, there are people who have accounts abroad, OFW [overseas Filipino workers] have accounts abroad…and by the way it’s not illegal [in the Philippines] to have a foreign bank account,” he added.

Tags: , , , , , ,

Related Posts