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second and fourth Thursday of the month. BDB Law is an affiliate of Punongbayan & Araullo (P&A).
Under RA 9480, to enjoy the immunities and privileges under its Section 6, such as
immunity from paying internal revenue tax liabilities for 2005 and prior years, the
taxpayer is required to pay an amnesty tax of 5 percent of his/her net worth (subject to
minimum amounts) as of December 31, 2005.
In addition, the applicant is required to file the following: a) Notice of Availment; b) Tax
Amnesty Return; and c) Statements of Assets, Liabilities and Net worth (SALN) as of
December 31, 2005.
The submission of SALN proves to be controversial because of the different valuation of
the items required to be declared as compared with the balance sheet amounts regularly
prepared by the auditors based on accounting standards. Hence, taxpayers need to
restate their respective balance sheets to conform to the requirements of RA 9480.
As provided in the implementing rules, the assets and liabilities should be valued and
presented in the SALN as follows:
Cash on hand and in bank in peso as of December 31, 2005, as well as cash
on hand and in bank in foreign currency, converted to peso as of December 31,
2005; and
One of the issues that is left unclear by DO 29-07 is on the matter of estate tax. Although
the estate is similarly treated as individuals, will it also follow that the estate tax will be
covered just like in the previous tax amnesties?
In the 1986 tax amnesty, the estate tax is covered if the heirs declared the inherited
properties in their own SALN and pay the amnesty tax on the resulting net worth. Would
the same rule apply?
Equally important to note is the effect of this amnesty law on the target collections of the
BIR. Will the Office of the President somehow reduce the revenue target collections at
least to a reasonable extent? Or will the BIR officials continue to sit at the edge of their
seats trying hard to attain the high collection targets to the detriment of taxpayers?
Questions now loom on whether this Tax Amnesty Act will generate the much-sought
revenue to eliminate our burgeoning budget deficit. Past tax-amnesty programs proved
to be ineffective insofar as addressing this perennial dilemma of the government.
However, if the real objective here is to bring in a large number of errant taxpayers into
the fold of national taxation to broaden and update the tax base, which in effect will
reduce future noncompliance, then the government may be on the right track in
implementing this piece of legislation.