Republic of the Philippines
HOUSE OF REPRESENTATIVES
Constitution Hills, Quezon City

SEVENTEENTH CONGRESS
Second Regular Session

HOUSE BILL No. ‘7105

Introduced by
Representatives Pantaleon D. Alvarez, Rodolfo C. Farifias and Dakila
Carlo E. Cua

AN ACT ENHANCING REVENUE ADMINISTRATION AND
COLLECTION BY GRANTING AN AMNESTY ON ALL UNPAID
INTERNAL REVENUE TAXES IMPOSED BY THE NATIONAL
GOVERNMENT FOR TAXABLE YEAR 2017 AND PRIOR YEARS

EXPLANATORY NOTE

The Philippines experienced poor tax collections in the previous
years. This is attributed to many factors such as poor tax administration,
low collection efficiency, corruption, and flawed tax policies. Dishonest
taxpayers were able to collude with corrupt government officials and
employees into getting away from paying the correct amount of taxes;
while taxpayers who are willing to pay the correct taxes are discouraged
from doing so by poor administrative policies.

The President's thrust in improving the state’s economic standing
resulted to the enactment of the recent Tax Reform and Inclusion Act
(TRAIN). TRAIN was designed to combat corruption, simplify taxation,
and improve tax collection.

This Bill is respectfully proposed by this representation in
connection with the TRAIN. Aside from giving the Government
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flexibility in collecting taxes and immediate revenues, this Bill also seeks
to expand the taxpayer base.

As we all know, there exist a vast number of unsettled taxes that
cannot be legally collected by our executive agencies without going
through the rigorous process laid down by law. Likewise, an
unaccounted number of individuals who have not but are now willing
to pay their taxes are discouraged by threat of prosecution.

Whether disputed and uncollected taxes are caused by erroneous
assessment or by the fault of the taxpayer, this representation believes
that it is high time for us to move forward, and provide taxpayers the
opportunity to be responsible by offering them a clean-slate. In this
regard, the immediate passage of this Bill is earnestly sought.

In view of the foregoing, immediate passage of this bill is earnestly
sought.

PANTALEON D.' AREZ noboue C. FARINAS

D. 0 E. CUA

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Republic of the Philippines
HOUSE OF REPRESENTATIVES
Constitution Hills, Quezon City

SEVENTEENTH CONGRESS
Second Regular Session

HOUSE BILL NO. 7105

Introduced by
Representatives Pantaleon D. Alvarez, Rodolfo C. Farifias and Dakila
Carlo E. Cua

AN ACT ENHANCING REVENUE ADMINISTRATION AND
COLLECTION BY GRANTING AN AMNESTY ON ALL UNPAID
INTERNAL REVENUE TAXES IMPOSED BY THE NATIONAL
GOVERNMENT FOR TAXABLE YEAR 2017 AND PRIOR YEARS

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

SECTION 1. Coverage. — There is hereby authorized and granted a tax amnesty
which shall cover all national internal revenue taxes for the taxable year 2017 and
prior years, with or without assessments duly issued therefore, that have remained
unpaid as of December 31, 2017: Provided, however, That the amnesty hereby
authorized and granted shall not cover persons or cases enumerated under Section 8
hereof.

SECTION 2. Availment of the Amnesty. — Any person, natural or juridical, who
wishes to avail himself of the tax amnesty authorized and granted under this Act
shall file with the Bureau of Internal Revenue (BIR) a notice and Tax Amnesty
Return accompanied by Financial Statements or a Statement of Assets, Liabilities and
Net worth (SALN) as of December 31, 2017, in such form as may be prescribed in the
implementing rules and regulations (IRR) of this Act, and pay the applicable
amnesty tax within two years from the effectivity of the IRR.

SECTION 3. What to Declare in the SALN. — The SALN shall contain a declaration
of fhe assets, liabilities and net worth as of December 31, 2017, as follows:

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1. Assets within or without the Philippines, whether real or personal, tangible
or intangible, whether capital or ordinary: Provided, That property other
than money shall be valued at the cost at which the property was acquired,
or its current Fair Market Value, whichever is higher: Provided, further,
That foreign currency assets and/or securities shall be valued at the rate of
exchange prevailing as of the date of the SALN;

2. All existing liabilities which are legitimate and enforceable, secured or
unsecured, whether or not incurred in trade or business; and

3. The net worth of the taxpayer, which shall be the difference between the
total assets and total liabilities.

SECTION 4. Presumption of Correctness of the SALN. — The information provided
by the taxpayer in the SALN shall be presumed true and correct. This presumption
may only be discredited by substantial evidence showing that the amount of declared
net worth is understated: Provided that, within one year following the date of filing
of the tax amnesty return and the SALN, the BIR or its agents shall initiate the
appropriate administrative proceeding as prescribed in the IRR to question the
veracity of the SALN.

SECTION 5. Grant of Tax Amnesty. — Except for the persons or cases covered in
Section 8 hereof, any person, whether natural or juridical, may avail himself of the
benefits of tax amnesty under this Act after paying the amnesty tax prescribed
hereunder:

I. Incases where no assessments were issued against the taxpayer:

(a) Individuals (whether Filipino, alien, 8% of the Net worth or
resident, or non-resident), Trusts, and 10,000, whichever is higher
Estates

(b) Partnerships, Stock Corporations, and Taxable Cooperatives

(1) With capital, or subscribed capital of — 8% of the Net worth or
up to P10 Million P10,000, whichever is higher

(2) With capital, or capital of above 8% of the Net worth or
P10 Million, but not exceeding 100,000, whichever is higher
P50 Million

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3) With capital, or subscribed capital of — 8% of the Net worth or
above P50 Million, but not exceeding 1,000,000, whichever is
P100 Million higher

(4) With capital, or subscribed capital of 8% of the Net worth or
above P100 Million 10,000,000, whichever is
higher

() Non-stock Corporations, Government 4% of the Net worth or P50,000,
Owned and Controlled Corporations — whichever is higher
Exercising Proprietary Functions

(d) Taxpayers who filed their balance sheet/SALN, together with their income
tax returns for 2017, and who desire to avail of the tax amnesty under this
Act shall amend such previously filed statements by including all undeclared
and under-declared assets and/or liabilities and pay an amnesty tax equal to
eight percent (8%) based on the resulting increase in net worth: Provided,
That such taxpayers shall likewise be categorized in accordance with, and
subjected to the minimum amounts of amnesty tax prescribed under the
provisions of this Section.

Il. __ In cases where assessments were issued against the taxpayer: Amnesty
tax shalll be equivalent to 50% of the basic tax assessed.

For purposes of this Act, “assessments” shall pertain to all types of tax
assessments and claims including disputed assessments and assessments based on
allegations of fraud. “Basic tax assessed”, shall mean the latest amount of tax
assessment issued by the BIR against the taxpayer, whether it be Preliminary, Final,
or Final Decision on Disputed Assessment, exclusive of penalties and surcharges.

Provided: that, except for cases provided under Section 8 hereof, the pendency
before the Court of Appeals or the Supreme Court of a tax case shall not prevent the
taxpayer from availing of the tax amnesty granted in this Act.

SECTION 6. Immunities and Privileges. — Those who availed themselves of the tax
amnesty under Section 5 hereof, and have fully complied with all its conditions shall
be entitled to the following immunities and privileges:

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1. The taxpayer shall be exempted from the payment of taxes, as well as any
addition thereto, and shall be immune from any civil, criminal or
administrative penalties under the National Internal Revenue Code of 1997,
as amended, arising from the failure to pay any and all internal revenue
taxes for taxable year 2017 and prior years.

2. The taxpayer's Tax Amnesty Returns and the SALN as of December 31, 2017
shall not be admissible as evidence in any and all proceedings that pertain
to taxable year 2017 and prior years, insofar as such proceedings relate to
internal revenue taxes, before any judicial, quasi-judicial or administrative
bodies in which he is a defendant or respondent, and except for the purpose
of ascertaining the taxpayer's net worth beginning January 1, 2018, the same
shall not be examined, inquired or looked into by any person or government
office. The taxpayer may use this provision as a defense, whenever
appropriate, in cases brought against him.

3. The books of accounts and other records of the taxpayer for the years
covered by the tax amnesty availed of shall not be examined: Provided, That
the Commissioner of Internal Revenue may authorize in writing the
examination of the said books of accounts and other records to verify the
validity or correctness of a claim for any tax refund, tax credit (other than
refund or credit of taxes withheld on wages), tax incentives, and/or
exemptions under existing laws.

The immunities and privileges provided under this Section shall not apply
where the person failed to file a SALN or Tax Amnesty Return, or in the administrative
cases initiated by the BIR to prove understatement of SALN as prescribed under
Sections 3 and 4 hereof.

Any income or asset not included or declared in compliance with this Act shall
not be covered by the provisions of this Act, and shall be subjected to taxation in
accordance with the provisions of the National Internal Revenue Code and other
special laws.

SECTION 7. When and Where to File and Pay. — The filing of the Tax Amnesty
Return and SALN, and the payment of the amnesty tax for those availing themselves
of the tax amnesty shall be made within two years starting from the effectivity of the
IRR. It shall be filed at the office of the Revenue District Officer which has jurisdiction
over the legal residence or principal place of business of the applicant. The Revenue
District Officer shall issue an acceptance of payment form authorizing an authorized
agent bank, or in the absence thereof, the collection agent or municipal treasurer
concerned, to accept the amnesty tax payment.

SECTION 8. Exceptions. — The tax amnesty provided this Act shall not cover the
following persons, or cases existing as of the effectivity of this Act:

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1. Withholding agents with respects to their withholding tax liabilities;

2. Those with pending cases falling under the jurisdiction of the Presidential
Commission on Good Government

3. Those with pending criminal cases filed in court for tax evasion and other
criminal offenses under chapter II of Title X of the National Internal Revenue
Code of 1997, as amended, and the felonies of frauds, illegal exactions and
transactions, and malversation of public funds and property under Chapters
Ill and IV of Title VII of the Revised Penal Code

4. Those with pending cases involving unexplained or unlawfully acquired
wealth or under the Anti-Graft and Corrupt Practices Act and Republic Act No.
7078, otherwise known as “An Act Defining and Penalizing the Crime of
Plunder”;

5. Those with pending cases filed in court involving violation of the Anti-Money
Laundering Act; and

6. Tax cases subject of final and executory judgment by the courts.

SECTION 9. Unlawful Divulgence of Tax Amnesty Return and Statement of Assets,
Liabilities and Net worth. — Except as otherwise provided herein and in Section 14
hereof, it shall be unlawful for any person having knowledge of the Tax Amnesty
Return and SALN filed pursuant hereto, to disclose any information relative to such
declaration and statement, and any violation hereof shall subject the offender to the
penalties under Section 10 (c) of this Act: Provided, however, That the Commissioner
of Internal Revenue may disclose the content of the Tax Amnesty Return and the
SALN upon the request of Congress pursuant to and in accordance with Section 20(A)
or Section 290 of the National Internal Revenue Code of 1997, as amended.

SECTION 10. Penalties. —

a. Any person who, having filed a statement or Tax Amnesty Return under this
Act, willfully understates his net worth to the extent of thirty percent (30%) or
more shall, upon conviction, be subject to the penalties of perjury under the
Revised Penal Code.

b. The willful failure to declare any property in the statement and/or in the Tax
Amnesty Return shall be deemed in prima facie evidence of fraud and shall
constitute a ground upon which attachment of such property may be issued in
favor of the BIR to answer for the satisfaction of any judgment that may be
acquired against the declarant.

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In addition to the penalties provided in paragraphs (a) and (b) above,
immediate tax fraud investigation shall be conducted to collect all taxes due,
including increments, and to criminally prosecute those found to have willfully
evaded lawful taxes due.

In the case of associations, partnerships, or corporations, the penalty shall be
imposed on the partner, president, general manager, branch manager,
treasurer, officer-in-charge and employees responsible for the violation.

c. Any person who makes an unlawful divulgence of information contained in
the Tax Amnesty Return or the SALN shall be penalized by a fine of not less
than Two Hundred Fifty Thousand Pesos (P250,000.00) and imprisonment of
not less than One year but not more than Six (6) years.

If the offender is an officer or employee of the BIR or any government entity,
he/ she shall likewise suffer an additional penalty of perpetual disqualification
to hold public office.

SECTION 11. Publication of List of Taxpayers and Filers. — Following. the
implementation of the tax amnesty authorized and granted under this Act, the
provisions of Sections 71 and 270 of the National Internal Revenue Code of 1997, as
amended, and Section 26 of Republic Act No. 6388, to the contrary notwithstanding,
the Commissioner of Internal Revenue shall, on or before May 31 following the close
of each calendar year, prepare a list containing the names of all taxpayers, their gross
income and amount of income taxes paid for the immediately preceding taxable year,
and allow the publication of the same in at least two newspapers of general circulation
or the Bureau of Internal Revenue website.

SECTION 12. Integrated Information Management Program. - For purposes of
enhancing revenue administration, revenue collection and policy formulation, the
Department of Finance, in coordination with the BIR, Department of Trade and
Industry, and Securities and Exchange Commission, and other concerned government
agencies shall institute an Integrated Information Management Program for the
effective use of information declared or obtainable from the Tax Amnesty Returns and
the SALN’s required to be filed under this Act.

SECTION 13. Disposition of Proceeds from the Tax Amnesty. - An amount
equivalent to Four Hundred Million Pesos (Php 400,000,000.00) of the collection from
the tax amnesty herein granted shall accrue to the Department of Finance and shall be
used exclusively for purposes of instituting an Integrated Information System as
mandated under Section 12 of this Act.

SECTION 14. Authority of the Commissioner to Inquire into and Receive Information
on Bank Accounts and Other Related Data Held by Financial Institutions. -
Notwithstanding any contrary provision of Republic Act No. 1405, otherwise known

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as the ‘Bank Secrecy Law’, Republic Act No. 6426, otherwise known as the ‘Foreign
Currency Deposit Act of the Philippines’, and other general and special laws, the
Commissioner is hereby authorized to inquire into and receive information on the
bank deposits and other related data held by financial institutions: Provided, That the
Commissioner is authorized to inquire into and receive information on bank accounts
and other related data held by financial institutions of a specific taxpayer or taxpayers
upon an obligation to exchange tax information with a foreign tax authority, whether
on request or automatic, pursuant to an international convention or agreement on tax
matters to which the Philippines is a signatory or a party of: Provided, further, That
the information obtained from the banks and other financial institutions may be used
by the Bureau of Internal Revenue for tax assessment, verification, audit and
enforcement purposes.

The exchange of information with a foreign tax authority, whether on request or
automatic, shall be done in a secure manner to ensure confidentiality thereof under
such rules and regulations as may be promulgated by the Secretary of Finance, upon
recommendation of the Commissioner and in accordance with International Common
Reporting Standards.

In case the exchange of information is upon request from a foreign tax authority, the
Commissioner shall provide the tax information obtained from banks and financial
institutions pursuant to a convention or agreement upon request of the foreign tax
authority when such requesting foreign tax authority has provided the information as
specified in Section 6 (F) of the National Internal Revenue Code, as amended, to
demonstrate the foreseeable relevance of the information to the request.

The term “foreign tax authority”, as used herein, shall refer to the tax authority or tax
administration of the requesting State under the tax treaty or convention to which the
Philippines is a signatory or a party of.

Likewise, the Commissioner is authorized to inquire into and receive information on
bank accounts and other related data held by financial institutions of any taxpayer
upon order of any court of competent jurisdiction in cases involving offenses covered
under Sections 254 and 255 of the NIRC, as amended, subject to rules and regulations
prescribed by the Secretary of Finance upon recommendation of the Commissioner of
Internal Revenue.

SECTION 15. Interconnectivity. - In ascertaining the correctness of any return, or in
making a return when none has been made, or in determining the liability of any
person for any internal revenue tax, or in collecting any such liability, or in evaluating
tax compliance, the Commissioner is authorized to obtain on a regular basis from any
person other than the person whose internal revenue tax liability is subject to audit or
investigation, or from any office or officer of the national and local governments,
government agencies and  instrumentalities, including government financial
institutions and government-owned or -controlled corporations, any relevant

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information such as, but not limited to, costs and volume of production, receipts or
sales and gross incomes of taxpayers, and the names, addresses, and financial
statements of corporations, mutual fund companies, insurance companies, regional
operating headquarters of multinational companies, joint accounts, associations, joint
ventures or consortia and registered partnerships, and their members: Provided, That
the BIR and other national government agencies, local government units (LGU), and
government agencies and instrumentalities, including government financial
institutions (GFl), and government-owned or -controlled corporations (GOCC), shall
establish electronic interconnectivity that will allow exchange of information relevant
to the needs of each agency as determined under joint rules issued by the heads of the
said offices and the Secretary of Finance: Provided, further, That if the data
requirements consist of information found in the income tax return of taxpayers, the
requirements under Section 71 of the National Internal Revenue Code (NIRC), as
amended, shall still be complied with.

SECTION 16. Implementing Rules and Regulations. — The Secretary of Finance shall,
in coordination with the Commissioner of Internal Revenue, promulgate and publish
the necessary rules and regulations within sixty (60) days from the effectivity of this
Act.

SECTION 17. Effectivity. — This Act shall take effect fifteen (15) days after its
publication in the Official Gazette or in any two newspapers of general circulation,

whichever comes earlier.

Approved,

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