Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

SEVENTEENTH CONGRESS
First Regular Session

3655

HOUSE BILL NO.

Introduced by Honorable Michael L. Romero

EXPLANATORY NOTE,

One of the top priorities of President Rodrigo Duterte’s administration is to introduce
reforms in the tax system. In his first State of the Nation Address (SONA), the president
emphasized that his “administration will pursue tax reforms towards a simpler, more equitable
and more efficient tax system that can foster investment and job creation,” This includes the
lowering of the personal and corporate tax rates which gained popular support from the business
sector and the populace

‘The proposed comprehensive tax reform packages are expected to result in a decrease in
revenue collections in the short term which may hamper the implementation of other reform
agenda of the government, The reform should also bring the desired end of strengthening tax
enforcement and ultimately collect more tax revenues to fund the operation of the government
and spur economic growth

To complement these initiatives, the grant of tax amnesty under certain terms and
conditions which shall cover all national internal revenue taxes for the taxable year 2015 and
prior years is a sound policy to take, The tax amnesty will certainly yield to an immediate
increase in tax collections and at the same time provide an opportunity to broaden our taxpayer
base, as well as giving erring persons/entities another chance to reform and become more
responsible taxpayers.



‘The present administration has proven its determination in the enforcement of our laws, It
serves as a strong warning to tax evaders that change in tax administration and enforcement had
started and that the grant of the tax amnesty is the best avenue for reform.

‘Thus, approval of skill is earnestly requested

EL L, ROMERO Ph.D.


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

SEVENTEENTH CONGRESS
First Regular Session

7 3655

HOUSE BILL NO.

Introduced by Honorable Michael L. Romero.

AN ACT TO INCREASE REVENUES AND TO PROVIDE THE FOUNDATION FOR
AN EFFECTIVE IMPLEMENTATION OF TAX REFORMS BY GRANTING AN
AMNESTY ON ALL UNPAID INTERNAL REVENUE TAXES IMPOSED BY THE
NATIONAL GOVERNMENT FOR TAXABLE YEAR 2015 AND PRIOR YEARS

Be it enacted by the Senate and the House of Rep
assembled:

emutives of the Philippines in Congress

SECTION 1. Coverage, — There is hereby authorized and granted a tax amnesty which shall
cover all national internal revenue taxes for the taxable year 2015 and prior years, with or
without assessments duly issued therefore, that have remained unpaid as of December 31, 2015
Provided, however, That the amnesty hereby authorized and granted shall not cover persons or
cases enumerated under Section 8 hereof,

SEC. 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 a Statement of
Assets, Liabilities and Networth (SALN) as of December 31, 2015, in such form as may be
prescribed in the implementing rules and regulations (IRR) of this Act, and pay the applicable
amnesty tax within six months from the effectivity of the IRR.


SEC, 3. What to Declare in the SALN, — The SALN shall contain a declaration of the assets,
liabilities and networth as of December 31, 2015, as follows:

1, Assets within or without the Philippines, whether real or personal, tangible or
intangible, whether or not used in trade or business: Provided, That property other than
money shall be valued at the cost at which the property was acquired: 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 networth of the taxpayer, which shall be the difference between the total assets
and total liabilities.

SEC. 4. Presumption of Correctness of the SALN, — The SALN as of December 31, 2015 shall
be considered as true and correct except where the amount of declared networth is understated to
the extent of thirty percent (30%) or more as may be established in proceedings initiated by, or at
the instance of, parties other than the BIR or its agents: Provided, That such proceedings must be
initiated within one year following the date of the filing of the tax amnesty return and the SALN.
Findings of or admission in congressional hearings, other administrative agencies of government,
and/or courts shall be admissible to prove a thirty percent (30%) under-declaration

SEC. 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, and pay the amnesty tax due thereon, based on his networth as of December 31, 2015 as
declared in the SALN as of said period, in accordance with the following schedule of amnesty
tax rates and minimum amnesty tax payments required:

(a) Individuals (whether resident or nonresident citizens, 5% or P50,000, whichever
including resident or nonresident aliens), Trusts and Estates —_ is higher

(b) Corporations

(1) With subscribed capital of above P50 Million 5% or P500,000 whichever
is higher

(2) With subseribed capital of above P20 Million up to 5% or —_-P250,000,

P50 Million whichever is higher

(3) With subscribed capital of PS Million to P20 Million 5% or P 100,000,
whichever is higher

(4) With subscribed capital of 5% or P25,000, whichever
is higher

below PS Million

(c) Other juridical entities, including, but not limited to, 5% or P50,000,
cooperatives and foundations, that have become taxable as of
December 31, 2015 whichever is higher.


(d) Taxpayers who filed their balance sheet/SALN, together with their income tax returns
for 2015, and who desire to avail of the tax amnesty under this Act shall amend such
previously filed statements by including still undeclared assets and/or liabilities and pay an
amnesty tax equal to five percent (5%) based on the resulting increase in networth
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.

SEC. 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

1. ‘The taxpayer shall be immune from the payment of taxes, as well as addition thereto,
and the appurtenant 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 2015 and prior years,

2. The taxpayer's Tax Amnesty Returns and the SALN as of December 31, 2015 shall not
be admissible as evidence in all proceedings that pertain to taxable year 2015 and prior
years, insofar as such proceedings relate to internal revenue taxes, before judicial, quasi-
judicial or administrative bodies in which he is a defendant or respondent, and except for
the purpose of ascertaining the networth beginning January 1, 2016, the same shall not be
examined, inquired or looked into by any person or government office. However, the
taxpayer may use this asa 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.

Al these immunities and privileges shall not apply where the person failed to file a SALN and
the Tax Amnesty Return, or where the amount of networth as of December 31, 2015 is proven to
be understated to the extent of thirty percent (30%) or more, in accordance with the provisions of
Section 3 hereof.

EC. 7. When and Where to File and Pay. — The filing of the ‘Tax Amnesty Return and the
payment of the amnesty tax for those availing themselves of the tax amnesty shall be made
within six months 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 filer. 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



SEC. 8. Exceptions,— The tax amnesty provided in Section 5 hereof shall not extend to the
following persons or cases existing as of the effectivity of this Act:

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 cases involving unexplained or unlawfully acquired wealth or
under the Anti-Graft and Corrupt Practices Act;

4, Those with pending cases filed in court involving violation of the Anti-Money
Laundering Law;

5. Those with pending criminal cases 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 III and IV of Title VII of the Revised Penal Code; and

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

SEC. 9. Unlanful Divulgence of Tax Amnesty Return and Statement of Assets, Liabilities and
Networth.— 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 290of the National Internal Revenue Code of 1997, as amended.

10. Penalties.

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

2, The willful failure to declare any property in the statement and/or in the Tax Amnesty
Return shall be deemed as 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

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

3. Any person who makes an unlawful divulgence of the Tax Amnesty Return or the
SALN shall be penalized by a fine of not less than Fifty thousand pesos (P50,000.00) and
imprisonment of not less than six years but not more than ten (10) 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 to vote
and to participate in any public election

SEC, 11. Moratorium on the Grant of Tax Amnesty, — In order to encourage and improve tax
compliance by taxpayers, it is hereby declared the policy of this Congress that the grant of tax
amnesty, in whatever manner and form, shall not henceforth be allowed: Provided, That this
moratorium shall likewise apply to any administrative tax amnesty by the BIR

SEC. 12. 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.

SEC. 13. 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.

SEC. 14, 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,