HULSE. OF REI

4iZS/ENTATIVES
RECEIVED
pare: 26 JUL 2016
Tin
BY.

Republic of the Philippines
HOUSE OF REPRESENTATIVES
‘Quezon City, Metro Manila

Seventeenth Congress
First Regular Session
1889

pressmMroy UNIT

BILLS 4\ + x

HOUSE BILL NO.

Introduced by Representative Arthur R, Defensor, Jr.

EXPLANATORY NOTE

This bill, entitled “Estate Tax Amnesty Law” grants amnesty in estate tax,
pursuant to the policies of maximizing collection of taxes, and of freeing-up capital
in the form of property, making them susceptible to business transaction, and in turn
generating objects of taxation.

The records of the Bureau of Internal Revenue (BIR) will bear that indeed
estate tax is a poor performer in the area of collection. In fact, the BIR has launched
“Project Rest in Peace” through the issuance of Revenue Memorandum Order No.
10-2010, Through this project, the BIR is targeting the increase in the number of
estate tax returns filed, and collection as well. This is an administrative measure to
closely monitor potential estate tax cases by establishing linkages with, and
accessing the records of, the Civil Registers, hospitals memorial parks, cemeteries,
funeral parks, crematoriums, judicial clerks of court, life insurance companies and
other relevant financial institutions,

The bill will complement the administrative measures of the BIR with a tax
measure that, in the long term, will increase tax collection, While an estate tax
amnesty, at first glance, appears to be a negative revenue generation measure, it is
actually not. The essence of the grant of estate tax amnesty under this bill is a radical
deviation from the existing rates under Republic Act No. 8424, as amended. A
radical decrease in estate tax rates is intended to make estate settlement and estate
tax payment attractive. The intended consequence of this is immediate and
concentrated estate tax collection in the short term, or within the period
contemplated in the bill, which would outweigh the merits of long term collection
under the present rates. Increased and concentrated short term collection will serve
its purpose of having immediately available funds for the present administration.
On the one hand, the more important purpose of the estate tax amnesty, as it would
encourage settlement of estates, is to free-up property of unsettled estates, so that
they may be made subjects of business transactions. Such properties after settlement
may be sold, leased, subject to joint venture agreements, or such transactions that
will have tax consequences, and result in increased tax collection for the
government.



On the above considerations, the passage of this bill is earnestly requested.

& R. DEFENSOR, JR.


15

Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City, Metro Manila

Sixteenth Congress
First Regular Session

1889

HOUSE BILL NO.

Introduced by Representative Arthur R, Defensor, Jr.

AN ACT GRANTING AMNESTY IN ESTATE TAX

Be it enacted by the Senate and the House of Representatives of the Philippines in Congress
Assembled:

Sec. 1. Title. - This Act shall be known as the “Estate Tax Amnesty Law”,

Sec. 2, Declaration of Policies. - The following are declared polices underlying
state:

a. to maximize the collection of taxes; and

b. to free-up capital in the form of property, making the same
susceptible to transaction, giving rise to further subjects of taxation

Sec. 3. Objectives. - The following are the objectives of this Act:

a, to grant amnesty in estate tax, that shall in the long term, result in
increased tax collection; and

b. to grant amnesty in estate tax, that shall promote the settlement of
estates, and in turn free-up properties of unsettled estates, with the
end view of generating financial transactions and stimulating,
economic activity

See. 4. Coverage and Duration of Tax Anmesty. ~ The tax amnesty granted herein
shall cover all unpaid estate taxes as of the time this Act shall have taken effect, and
those that shall be due within five (5) years henceforth

Sec. 5. Grant of Tax Anmesty. - Within the period of the estate tax amnesty as
provided in the preceding section, estate tax shall be levied, assessed, collected and
paid upon the transfer of the net estate, as determined in accordance with Section 85


28 and 86 of Republic Act No. 8424, as amended, of every decedent, whether resident or
29 non-resident of the Philippines, based on the value of such net estate, as computed in
30 accordance with the following schedule:

3I
32 “If the net estate is:
Over | ButNot | The Tax Shall Plus Of the
_ Over | Be _| Excess Over
I P 2,000,000 0
| 2,000,000 5,000,000 15,000 | 5% | 2,000,000
5,000,000 10,000,000 135,000 8% |_ 5,000,000
[10,000,000 50,000,000 465,000 | 11% | 10,000,000 _|

33 Estates with a net estate value exceeding fifty million pesos (50,000,000) shall
36. be levied, assessed and pay estate tax in accordance with the schedule in Section 84 of
37 Republic Act No. 8424, as amended

39 Sec. 6. Applicability of Republic Act No. 9480. - Section 6, on the grant of
40 immunities and privileges, Section 8, on exceptions, Section 9, on divulgence of tax
41 amnesty return, and Section 10, on penalties, of Republic Act No. 9480, shall apply to
42. the herein grant of estate tax amnesty, in so far, as they are relevant.

44 Sec. 7. Implementing Rules and Regulations. - The Secretary of Finance shall, in
45 coordination with the Commissioner of Internal Revenue, promulgate and publish
46 rules and regulations for the implementation of this Act, within sixty (60) days after
47 the same shall have taken effect.

49 Sec. 8. Effectivity. - This Act shall take effect fifteen (15) days after its
50 publication in the Official Gazette, or in any two (2) newspapers of general

51 circulation, whichever comes earlier.

Approved.