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By: Euney Marie J. Mata-Perez on February 21, 2019

A year ago today, we published our first article in this column, entitled “A Good Beginning” ( It was the beginning of a journey and, after publishing a total of 52 articles, we continue to write. We are grateful to, and we thank, The Manila Times for the opportunity.

The new tax amnesty law

We finally have our estate tax amnesty, two years after it was initially proposed in Congress in early 2017. We have previously written that this simpler amnesty should have gone ahead of the general (income tax) amnesty, which was vetoed by the President.

There is no better time to avail of the estate tax amnesty: the 6 percent estate amnesty tax is based on the value of the decedent’s total net estate at the time of death, it is payable without penalties and surcharges, and it can be availed of within two years from the effectivity of the implementing rules to be issued by the Bureau of Internal Revenue (BIR).

The President vetoed the provision in the estate tax amnesty bill which states that if there are properties in the name of another or previous decedent, only one estate amnesty return shall be filed. We understand that such “one return” provision was inserted during the Bicameral Committee deliberations. Citing our Civil Code rules on succession, the President said estate tax is not a tax on the property but on the “privilege” of transferring the property to the heirs; thus, the 6 percent estate tax is more than a fair imposition of the privilege. He also vetoed the provision which stated that estate tax amnesty returns shall be conclusively presumed true and correct, as he believes that the “privilege” of availing of the amnesty should be balanced with “accountability”.

On the general amnesty, the main reasons for the Presidential veto are the failure of Congress to 1) break the walls of the bank secrecy act, 2) provide the framework for the Philippines to comply with the international standards on transparency and exchange of information, and 3) provide for safeguards against those who abuse the tax amnesty by declaring untruthful assets or net worth.

The proposed amendments to the Bank Secrecy Law (Republic Act [RA] No. 1405) were originally part of the bills which led to the passage of RA No. 10963 or TRAIN 1, as proposed amendments to Sections 5 and 6 of the Tax Code. However, they were deleted in the final versions of the bills and TRAIN 1.

The other provision which was deleted in the final enrolled bill was the provision in House Bill No. 8554 which provided that the amnesty shall not apply if it is proven that the assets or net worth upon which the amnesty tax is based is understated by 30 percent or more.

The non-passage of the amendments to the Bank Secrecy Law and the deletion of the safeguard against abuse provision led the President to believe that the general amnesty will be “overgenerous and unregulated” and “would create an environment ripe for future tax evasion.”

While we agree with the reasons behind the President’s veto, the non-passage of a good general tax amnesty is a set-back to the generation of more revenues and the expansion of tax base. The other benefit of a general tax amnesty would have been to allow those who are not yet within the tax system, i.e., those in the underground economy and tax evaders, to come out clean and form part of the tax base. This opportunity is lost, for now.

As of this writing, we understand that the Department of Finance and BIR will continue to push for the passage of the amendments to Bank Secrecy Law and provide the framework for us to comply with the international standards on transparency and exchange of information. However, because of the coming elections, such measures will have to wait until the next Congress resumes sometime in June.

The amnesty for delinquents though was approved by the President. This is an unprecedented measure, since taxpayers supposedly have lost all their remedies once their taxes have become delinquent and the BIR will just enforce collection measures. With this amnesty, taxpayers can pay a portion of their delinquent taxes (50 percent or 60 percent), without penalties, and be free from the collection measures of the BIR. Also, for the first time, taxes withheld but not paid to the government are covered by the amnesty, upon the payment of 100 percent of the basic tax assessed.

In any case and in the meantime, we should take advantage of the estate tax amnesty. We will not likely see such an amnesty again for a long period of time. Its availment will free properties which have been undeveloped because of the non-payment of the estate tax, thereby unlock their potential, generate more tax revenues and spur the economy. All is not lost.

Euney Marie J. Mata-Perez is a CPA-Lawyer and the Managing Partner of Mata-Perez, Tamayo & Francisco (MTF Counsel). She is a corporate, M&A and tax lawyer. She is the President of the Asia-Oceana Tax Consultants’ Association. This article is for general information only and is not a substitute for professional advice where the facts and circumstances warrant. If you have any question or comment regarding this article, you may email the author at or visit MTF Counsel’s website at

From the The Manila Times website on February 21, 2019

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Euney Marie J. Mata-Perez

Mark Anthony P. Tamayo

Gerardo Maximo V. Francisco