13th CONGRESS OF THE REPUBLIC 
) 
OF THE PHILIPPINES 
1 
First Regular Session 
1 
- 
1 
SENATE 
CIECEIVECP BY :- 
S. BILL NO. 
1325 
Introduced by Senator Recto 
EXPLANATORY NOTE 
The government is experiencing a budget deficit caused primarily by low 
revenue generation brought about by the slowdown of business. Given 
the government's limited capability to finance its budgetary requirements, 
it will be constrained in the delivery of programs and services. especially 
the basic social services needed by the less privileged. Thus, there is.a 
need to find ways to improve revenue generation. 
This bill seeks to broaden the tax base by requiring taxpayers to file their 
statement of assets, liabilities and networth. By declaring the networth, this 
will greatly contribute to the government's effort to organize tax records 
and improve the tax system. It will promote a broader tax base that will 
lead to collection of higher tax revenues. 
The provision for immunity from civil, criminal or administrative penalties 
arising from the previous non-payment of correct taxes will encourage 
those in the underground economy to surface. By helping legitimize these 
hidden businesses, the government can collect more income and other 
forms of taxes, and encourage such businesses to pour in more 
investments. 
This bill can supplement the government's attempts to flush out money 
laundering. It will create a large database of taxpayers with their 
corresponding assets, liabilities, and net worth. This will help prevent 
money laundering in the Philippines. 
With this bill, capital outflow wili be prevented. Since the tax amnesty will 
allow previously hidden incomes and transactions to surface, there will be 
no need to transfer these funds to other countries. Furthermore, more 
funds will be freed and released into the system. These funds can be used 
for investment in productive activities resulting in increased tax collections. 
In view of the foregoing, immediate passage of this bill is earnestly 
sought. 
RGAiIoX amnerly doc 


I 
i 
13th CONGRESS-OF THE REPUBLIC 
) 
OF THE PHILIPPINES 
1 
Second Regular Session 
1 
SENATE 
1825 
S. BILL NO. 
Introduced by Senator Ralph G. Recto 
AN ACT 
TO MAXIMIZE THE COLLECTION OF REVENUES BY REQUIRING THE FILING OF 
STATEMENT OF ASSETS, LIABILITIES AND NETWORTH AS OF DECEMBER 31, 
2001 AND BY GRANTING TAX AMNESTY ON ALL UNPAID INTERNAL REVENUE 
TAXES IMPOSED BY THE NATIONAL GOVERNMENT FOR TAXABLE YEAR 2001 
AND PRIOR YEARS 
Be it enacted by the Senate and House of Representatives of the 
Philippines in Congress assembled: 
1 
SECTION 1. Filing of Statement of Assets, Liabilities and Networth. - 
2 
Every person, natural and juridical, deriving income or owning properties 
3 
with an acquisition cost of at least One hundred thousand pesos 
4 
(PlO0,OOO.OO) as of December 31, 2001, within the' taxing jurisdiction of the 
5 
Philippines, shall render in triplicate a frue and torrect statement of his 
6 
assets, liabilities and networth as of December 31, 2001 in such form as 
7 
8 
9 
10 
1 1  
12 
13 
14 
shall be prescribed by the Commissioner of Internal Revenue. 
SEC. 2. What to Declare. - The statement shall contain a 
declaration of the assets, liabilities and networth as of December 31,2001, 
as follows: 
(a) Assets within or without the Philippines, whether real or personal, 
tangible or intangible, whether or not used in trade or business: 
(b) All existing liabilities which are legitimate and enforceable, 
secured or unsecured, whether or not incurred in trade or business; and 
1 


1 
2 
3 
4 
5 
6 
7 
8 
9 
10 
1 1  
12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
22 
23 
24 
IC) The networth of the taxpayer, which shall be the difference 
between the total assets and total liabilities. 
SEC. 3. Conditions of the Tax Amnesty. - Any person who wishes to 
avail himself of the benefits of amnesty shall file in triplicate a notice and 
return in such form as shall be prescribed by the Commissioner of Internal 
Revenue together with a copy of the statement filed pursuant to Section 1 
of this Act and pay the amnesty tax due thereon, based on his networth 
as of December 31, 2001, at the following rates: 
[a) Individuals 
[ 1 ) Resident citizens ......................... 
3% or P20,OOO. 
whichever is higher 
(2) Non-resident citizens ------------------- 2% or P15,000, 
whichever is higher 
(b) Corporation 
(1) Large Taxpayers (with 
subscribed capital of above 
p5O Million) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  --3y or P500.000, 
Whichever is higher 
[2) Medium Scale [with 
subscribed capital of above P20 
Million up to P50 Million) -----------3% 
or P100,OOO 
~ 
I 
whichever is higher 
SEC. 4. Purposes of the Statement of Assets. Liabilities and Networth. 
-The Statement of Assets, Liabilities and Networth filed pursuant to Section 
2 


1 
2 
3 
4 
5 
6 
7 
a 
9 
10 
1 1  
12 
13 
14 
15 
16 
17 
i a  
19 
20 
21 
22 
23 
24 
1 hereof shall be considered as true and correct, except where the 
amount ,of networth is proven, through third party information. to be 
understated to the extent of thirty percent (30%) ;or more, for purposes of 
determining future tax liabilities for the taxable year 2002 and onwards of 
the declarant: Provided, however, That in the case of a declarant who 
did not avail of the tax amnesty, his or her Statement of Assets, Liabilities 
and Networth may also be considered in determining the unpaid internal 
revenue taxes, if any, for the taxable year 2001 and prior years, subject to 
the provisions of Sections 203 and 222 of Republic Act No. 8424, otherwise 
known as the "Tax Reform Act of 1997," regarding the period of limitation 
upon assessment and collection. 
SEC. 5. Exceptions. - Taxpayers qualified under Section 1 of this Act 
may avail themselves of the amnesty granted herein except that the 
immunities in Section 8 shall not apply to the following cases, insofar as the 
tax liabilities involved therein are concerned: 
(a] Those with cases already filed in court as of the effectivity of the 
Act; 
(bJThose with final assessments; and 
(c) Withholding agents with respect to their withholding tax liabilities. 
SEC. 6. When and Where to File and Pay. -The Statement of Assets, 
Liabilities and Networth, together with the notice and amnesty return, 
which shall be prepared in triplicate, shall be filed on or before June 30, 
2003 at the Office of the Revenue District Officer which has jurisdiction 
over the legal residence or principal place of business of the filer. The 
! 
3 


1 
Revenue District Officer shall issue an acceptance of payment form 
2 
authorizing an authorized agent bank, or in the absence thereof, the 
3 
Collection Agent or Municipal Treasurer concerned to accept the 
4 
amnesty tax. If the filer elects to pay by installment, payments shall be 
5 
made in accordance with the schedule provided in the succeeding 
6 
7 
a 
9 
10 
1 1  
12 
13 
14 
15 
16 
17 
i a  
19 
20 
21 
22 
23 
Section. , 
SEC. 7. Schedule of Payment of Amnesty Tax. - Where the taxpayer 
elects to pay by installment, the amnesty tax imposed herein shall be paid 
as follows: 
(a) If fifty thousand pesos (P50.000.00) or less, the tax must be paid 
at the time of the filing of the return, but not later than June 30, 2005; 
(b) If more than fifty thousand pesos (P50,OOO.OO) but not exceeding 
five hundred thousand pesos (P500,000.00), the tax may be paid in two (2) 
equal installments: the first, upon the filing of the return but not later than 
June 30,2005; and the second, on or before July 31,2005; 
(c) If more than five hundred thousand pesos (P500.000.00) but not 
exceeding five million pesos (P5,000,000.00), the tax may be paid in three 
(3) equal installments: the first, upon the filing of the return but not later 
than June 30, 2005; the second, on or before July 31, 2005; and the last, 
on or before August 31, 2005; and 
(d) If more than five million pesos (P5,000,000.00), the tax may be 
paid in four (4) equal installments: the first, upon the filing of the return but 
not later than June 30, 2005; the second, on or before July 31, 2005; the 
4 


1 
2 
3 
4 
5 
6 
7 
8 
9 
10 
1 1  
12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
22 
23 
24 
third, on or before August 31, 2005; and the last, on or before September 
30, 2005. 
If the amnesty tax or any installment thereof is not paid on its due 
date, a surcharge equivalent to twenty five percent (25%) of the unpaid 
amount shall be collected. The unpaid tax 'or installment and the 
surcharge shall be paid not later than one ( I )  month from due date 
thereof, otherwise the application for tax amnesty shall be denied. No 
case hereunder shall result in a refund. 
SE& 8. Immunities and Privileges. - Upon full compliance with the 
~ 
conditions of the tax amnesty: 
(a) The taxpayer shall be immune from the penalties, civil, criminal 
or administrative, under the National Internal Revenue Code of 1997, as 
amended, the Revised Penal Code, the Anti-Graft and Corrupt Practices 
Act or any other law applicable thereto, arising from the failure to pay 
any and all internal revenue taxes for taxable year 2001 and prior years, 
subject to the exceptions in Section 5 hereof. 
(b) The taxpayer's tax amnesty declaration and Statement of 
Assets, Liabilities and Networth, shall not be admissible as evidence in all 
proceedings that pertains to taxable year 2001 and prior years insofar as it 
relates to internal revenue taxes before judicial, quasi-judicial or 
adminisfrative bodies in which he is a defendant or respondent, and, 
except for the purpose of ascertaining the Networth beginning January 1, 
2002, the same shall not be examined, inquired or looked into by any 
person, government office, bureau or office. powever, the taxpayer may 
5 


1 
2 
3 
4 
5 
6 
7 
8 
9 
10 
1 1  
12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
22 
23 
24 
use this as a defense in all cases brought against him covered by the 
immunity provision under Section 8(a) hereof. 
IC) The books of account and other records of the taxpayer for the 
years when tax amnesty was availed 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 grant of any tax refund, tax credit 
(other than refund or credit of taxes withheld on wages], tax incentives, 
and/or exemptions under existing laws. 
i 
i 
AWthese immunities and privileges shall not apply where the person 
failed to file a Statement of Assets, Liabilities and, Networth or notice and 
return ofitax amnesty, or where the amount of networth as of December 
31, 2001 is proven, through third party information, to be understated to 
the extent of thirty percent (30%) or more. 
~ 
SEC. 9. Unlawful Divulgence of Amnesty Tax Return and Statement 
of Assets, Liabilities and Networth. - Except as otherwise provided herein, it 
shall be unlawful for any person having knowledge of the tax amnesty 
declaration and the Statement of Assets, Liabilities and Networth 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 (lO)(c] of this Act: Provided, however, That the 
Commissioner of Internal Revenue mav disclose the content of the tax 
amnesty declaration and Statement of Assets, Liabilities and Networth 
upon the request of Congress pursuant to and in accordance with 
6 


1 
2 
3 
4 
5 
6 
7 
a 
9 
10 
I 1  
12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
22 
23 
24 
Section 20(a) and Section 290 of the National Internal Revenue Code of 
1997, as amended. 
SEC. 10. Penalties. - (a) Any person required under this Act or by 
regulations promulgated thereafter to file a Statement of Assets, Liabilities 
and Networth, who willfully fails to file such statement shall, upon 
conviction, be fined not less than Ten thousand pesos (PlO,OOO.OO) but not 
more than Twenty thousand pesos (P20,OOO.OO) and suffer imprisonment of 
not less than one (1) year but not more than six (6) years. 
(b) 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. 
~ 
(c) ,The will failure to declare any property in the statement and/or 
in the tax amnesty return shall be deemed a prima facie evidence of 
fraud and shall continue a ground upon which attachment of such 
property may issue in favor of the Bureau of Internal Revenue [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), (b) and (c) 
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 


1 
2 
3 
4 
5 
6 
7 
8 
9 
10 
1 1  
12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
22 
23 
24 
manager, treasurer, officer-in-charge and employees responsible for the 
violation. 
(d) The unlawful divulgence of amnesty tax return and Statement of 
Assets, Liabilities and Networth shall be penalized by a fine in the amount 
of not less than Fifty thousand pesos (P50.000.00) but not more than One 
hundred thousand pesos (P100.000.00) and suffer imprisonment of not less 
than ten (10) years but not more than fifteen (15) years. 
If the offender is an officer or employee of the BIR or any 
government entity, he shall likewise suffer an additional penalty of 
perpetual disqualification to hold public office, to vote and to participate 
in any public election. 
SEC. 11. Publication of List of Taxpayers and Filers. - Following the 
implementation of the tax amnesty authorized knd granted under this 
Act. the provisions of Sections 71 and 270 of the National Internal Revenue 
Code, as amended, and Section 26 of Republlc Act No. 6388, to the 
contrary notwithstanding, the Commissioner of Internal Revenue, shall, on 
or beforelMay 31 following the close of each calendar year, prepare a list 
containing the names, addresses, type of business, gross sales/receipts 
during the year and the amount of income taxes, paid by each taxpayer 
and allow the publication of the same by any publishing company, 
newspaper and/or magazine of general circulation. 
SEC. 12. lnvolvemenf of Local Government Units. - For purposes of 
ascertaining the taxpayer's networth as of January 1, 2002, all local 
government units are hereby directed to provide cooperation and 
8 


1 
assistande to the BIR in determining the accuracy of the taxpayer's 
2 
declaration in his Statement of Assets, Liabilities and Networth filed 
3 
4 
5 
6 
7 
8 
9 
Approved. 
pursuant to Section 1 of this Act. 
SEC. 13. Implementing Rules and Regulations. - The Secretary of 
Finance shall, upon the recommendation of the Commissioner of Internal 
Revenue, promulgate and publish the necessary rules and regulations for 
the effective implementation of this Act. 
SEC. 14. Effectivity.- This Act shall take effect immediately. 
9