Press Release
May 18, 2021

On SBN 2208: Extending the Estate Tax Amnesty

By Senator Pia S. Cayetano
Chairperson, Senate Committee on Ways and Means

May 18, 2021

Mr. President, distinguished colleagues, today, I rise to sponsor and seek your support for Senate Bill No. 2208, under Committee Report No. 256, which amends Section 6 of Republic Act 11213 or the Tax Amnesty Act.

Passed in 2019, Republic Act No. 11213, otherwise known as the Tax Amnesty Act, gave taxpayers a one-time opportunity to settle their tax obligations, including an Estate Tax Amnesty Program. The filing of estate tax amnesty returns became effective on June 15, 2019, which gives a reasonable tax relief to estates with outstanding tax liabilities.

In particular, estates of decedents who died on or before December 31, 2017 and whose estate taxes have not been paid or have accrued as of December 31, 2017 are given the period of June 15, 2019 until June 14, 2021 to file their estate tax returns. This deadline is only a few weeks away.

Unfortunately, just ten (10) months after the law was enacted - in March 2020 - a global pandemic hit us, disrupting our daily lives, sending us into lockdowns, and affecting our ways of doing business.

Due to the strict travel restrictions and stalled economic activities in the time of COVID-19, many Filipinos have been unable to file their tax returns and settle their tax obligations. And the community quarantines imposed in different parts of the country prevented taxpayers from availing of the tax amnesty mandated by law.

Allow me to share the data cited by the BIR during our committee hearing. According to the bureau, the collected revenue from the estate tax amnesty program is only around 2.5 billion pesos, which is below its expected estimated additional revenue of 6.28 billion pesos.

Having said these, the Committee deems it appropriate that we extend the period of availment of the estate tax amnesty for another two years, in order to allow Filipinos who have not been able to affordably settle their outstanding tax liabilities during the period, to do so. At the same time, extending the program will also provide the government with additional revenues that will fund priority programs for the benefit of the people.

The proposed measure is essentially identical to the transmitted House Bill No. 7068. In the interest of time due to our limited session days and the upcoming June 14, 2021 expiration of the Estate Tax Amnesty, we did not deviate from the House version. Thus, we extended the period to avail of the estate tax amnesty from June 15, 2021 until June 14, 2023. And, we introduced one new amendment, which is the removal of the requirement of the proof of settlement in order to avail of the estate tax amnesty.

Allow me to explain, Mr. President. During the hearing, it was pointed out by various resource persons, that one main reason for non-availment of the estate tax amnesty is the fact that the heirs could not produce "proof of settlement," which is required in the Tax Amnesty Act. The Committee has decided, after hearing all the experts, to delete this requirement given that under the laws of succession, ownership is transmitted upon the death of the decedent, whether or not it has been supported by any judicial or extrajudicial form.

This legislation will further help our economy recover as Estate Tax Amnesty will allow access to previously locked assets. According to the assessment of the National Tax Research Center (NTRC), "the grant of estate amnesty will unlock assets still registered under unsettled estates so that these may be used for commercial or economic activities that would create investment, jobs, and taxable transactions."

Mr. President, there is no denying that the adverse effects of COVID-19 are very much evident in all aspects of our lives, not just in health. We have not only lost lives to this pandemic, we have also lost precious time. While we remain focused on protecting people's health and safety from the virus, we must also address the disruptions COVID-19 caused to other sectors, such as our economy.

Our current condition necessitates and justifies the need to pass this measure at this appropriate time. Surely, its enactment can provide economic relief for many Filipinos during this time of global health and economic crisis.

Thank you, Mr. President.

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