Duterte vetoes 'overgenerous, unregulated' general tax amnesty provision

President Rodrigo Duterte vetoed a provision of the tax amnesty bill which grants a general amnesty program as he asked Congress to revise the proposed legislation to include the lifting of bank secrecy for fraud cases.

Duterte on February 14 signed Republic Act 11213, a copy of which was released by Malacañang on Monday.

The President rejected the general tax amnesty for all unpaid internal revenue taxes including income tax, withholding tax, capital gains tax, donor's tax, value added tax, documentary stamp tax, other percentage taxes and excise taxes collected both by the Bureau of Internal Revenue and Bureau of Customs for taxable year 2017 and prior years.

Duterte approved the estate tax amnesty and the amnesty on delinquency taxes.

The President, however, vetoed items on one-time settlement of estates for properties subject of multiple unsettled estates and presumption of correctness of estate tax amnesty returns.

Under the Constitution, the President has line-item veto power for any budget, tax and tariff bill passed by Congress.

In a letter to Congress, Duterte said he was constrained to veto the portion of the bill covering general amnesty because of the lack of provisions "breaking down the walls of bank secrecy, setting the legal framework for us to comply with international standards on exchange of information for tax purposes, and safeguarding against those who abuse the amnesty by declaring an untruthful asset or net worth."

"A general amnesty that is overgenerous and unregulated would create an environment ripe for future tax evasion, the very thing we wish to address," the President said.

Duterte said the country's experience with the 2006 tax amnesty under Republic Act 9480 "has shown that without safeguards and measures against tax evasion, the objectives of an amnesty such as raising revenues and expanding the tax base cannot be fully achieved."

The President then asked Congress to pass another general tax amnesty bill that provides for the lifting of bank secrecy rules for fraud cases, the inclusion of automatic exchange of information and safeguards to ensure that asset or net worth declarations are truthful.

"With these provisions, the general tax amnesty will meet both its tax administration and revenue purposes," he said.

Still, Duterte urged taxpayers to avail of the opportunity to "wipe the slate clean."

"More than the much-welcomed revenue to be generated by the law, the amnesty is about rebuilding trust between the government and the people—an opportunity for citizens to disclose past failings and for the government to forgive them with the expectation of better compliance in the future," he said. —KG/RSJ, GMA News