Senators demand ‘compelling reason’ to extend estate tax amnesty
MANILA, Philippines — Although the Senate is under pressure to quickly pass the bill extending the deadline to avail of estate tax amnesty, several lawmakers on Friday asked for a “compelling reason” to do so, noting that the government agencies did not present any data-driven basis to justify their support for the proposed measure.
Senator Sherwin Gatchalian, who presided over the first Senate Ways and Means panel hearing on the bill, was honest about the need to rush the passage of the proposed law before Congress goes on sine die adjournment in early June.
“We’re kind of on a fastbreak. We want to tackle everything this afternoon. Hopefully, we will not have another hearing. We will do away with the technical working group. This hearing is a de facto technical working group,” he said partly in Filipino.
Gatchalian said he hopes to have the bill sponsored in the Senate plenary on Tuesday at the latest.
Although in a hurry, senators still asked for sufficient justification to push back for a second time the deadline to avail of estate tax amnesty.
Senator Nancy Binay asked Finance Undersecretary Dakila Elteen Napao about their collection estimate should the extension push through.
“We don’t have the data yet. Only sort of an estimate, probably double or a similar amount to the one generated in the first extension,” Napao said.
But Binay was seemingly displeased with his answer.
“I’m a bit concerned that there is no study done on their target if we do extend the tax amnesty [availment],” she said.
Binay then asked about the estate tax collection from the previous years, excluding those from the estate tax amnesty program.
But neither Napao nor Internal Revenue Assistant Commissioner for Assessment Service Ma. Luisa Belen had the data on hand.
Like Binay, Gatchalian was also seemingly dissatisfied with the lack of data to back the Department of Finance and Bureau of Internal Revenue’s support for the proposed measure.
“The support cannot be angpao support. The support should have some basis. And the best basis here is how much we can collect in addition to the extension. That’s fundamental. That’s a fundamental question that we all need to answer before we can move forward. Or else, we’re just wasting so much time,” he said.
Binay argued that there was reason to extend the deadline for estate tax amnesty availment the first time due to the pandemic.
“But now, apparently, the target [collection] was reached, so the DOF and the BIR need to give us a compelling reason to extend this tax amnesty,” she said.
Gatchalian reiterated their lingering question about the expected collection value from extending the period of availment of estate tax amnesty, noting that in 2021 – a pandemic-plagued year – there was a “surge” in tax payments.
“In other words, we go back to the original question: What targets are you projecting? We just want to justify to our constituents that we’re extending this because the government can collect more revenues,” he pressed.
Gatchalian noted that the House version of the proposed tax measure also did not tackle the target collection if the extension is approved.
“That’s a critical piece of information. That is a reason for us to proceed to extend,” he said.
Gatchalian again called for a “valid, compelling reason” to extend the estate tax amnesty deadline. He argued that the essence of tax amnesty is only “diminished” if it keeps getting extended.
He later asked the National Economic Development Authority (Neda) for its study on the contributions to economic activity of the current and future estate tax amnesty programs. But the Neda, too, could not give an answer.
“So why did you support [the bill]? Just because we filed it, it doesn’t mean we’ll push it. We also want to hear from the supporters on why the bill is relevant and can deliver positive reports,” he said.
No financial capacity
In the push to push back the deadline for the availment of estate tax amnesty, Tax Management Association of the Philippines President Suzette Sy said some people want to pay their taxes but have no financial capacity to do so.
Gatchalian said that, if financial capacity is the concern then, “extending it will not have any effect.”
But Sy said it would, if the extension is used as means to pay in installment.
Hearing this, Gatchalian proposed to add a provision in the proposed measure that would add an installment feature.
“I think what we’re trying to tap here is our poor constituents. If we embed that here to help our poor constituents, administratively, it’s not a problem. Conceptually, we’ll reach a different segment of taxpayers. So, I think it’s logical to include an installment feature,” he said.
Toward the tail-end of the hearing, Gatchalian asked that President Ferdinand Marcos Jr. certify the proposed measure as urgent so they can tackle the bill at a faster pace.
Several House lawmakers earlier urged the Senate to quickly pass the bill after the chamber passed on Monday its version of the measure that would extend the estate tax amnesty deadline for another two years.
But Senate President Juan Miguel Zubiri said the chamber must follow the rules in tackling and passing bills as stated in the Constitution.