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AVAIL OF TAX AMNESTY: BIR

THE Bureau of Internal Revenue (BIR) 13 urged the people to avail of the estate tax amnesty and not wait for the fast-approaching deadline on June 14, 2021.

Atty. Isaac “Jun” Darcera Jr., assistant chief of the BIR Regional Revenue 13 legal division, said the estate tax amnesty law, passed by Congress and signed into law by President Rodrigo Duterte, is considered a gift of the Duterte administration to the Filipino people.

Atty. Jose Hector “Boom” Baronda, the chief of the BIR 13 legal division, also urged the heirs of properties whose owners died several years ago to apply for estate tax amnesty to reduce their obligation.

BIR 13 which covers Cebu and Bohol is led by Atty. Eduardo Pagulayan, the director.

Darcera told DYRC radio and Cebu Business Week that an estate tax is a privilege to transfer the properties in the name of the deceased to his heirs.

Darcera said that if we follow the law, the computation of estate tax is when the property owner died, and what law to be used. In the old law, the estate tax was up to 20 percent rate if the value is P10 million and above. If the value of the property is more than P10 million the BIR computation is not more than 20 percent. If the heirs fail to file the estate, there is an interest of 20 percent per annum, plus 25 percent surcharge for late filing.

“That’s why, without the estate tax amnesty, some heirs will be forced to sell their inheritance to pay the piling estate tax obligation to the BIR,” Darcera said.

In the estate tax amnesty, the old rate is now reduced to six percent per annum, with out surcharge and interest.

“So, the estate tax amnesty is the solution to all heirs who failed to report to the BIR the demise of the original owners of the properties that they’ve inherited, hence, they also failed to file the estate tax return that increased every year because of interests,” Darcera said.

If the heirs will avail of amnesty, the minimum estate tax must be P5,000. If estate tax due is below P5,000 like P2,000 or P3,000, the heirs will have to pay P5,000 So, it’s better to just pay the P2,000 or P3,000 without availing amnesty.

But if the original obligation was P2,000 or P3,000 but it became P100,000 or P200,000 based on the latest property value, they may apply for amnesty to reduce it.

Darcera said that if the original property owner was the grandfather of the heir who died in 1960 and the estate tax obligation was only P200, the grandchild may use the old law of BIR as to when he died. If the obligation is lesser than P5,000, no need to avail of the amnesty.

Just pay the actual tax with the original amount, interest, penalty and surcharge.

But normally, Darcerea said an heir can save under the estate tax amnesty. Imagine, if the basic is just a small amount, but with 25 percent surcharge, plus 20 percent interest per year, the obligation becomes bigger and bigger until the value of the properties may be equivalent or lesser to the BIR obligation.

Darcera said if the grandfather has died, and the grandchildren planned to sell it, the process in the Register of Deeds is that the title cannot be transferred to the names of the heirs without first paying the estate tax based on whose name is there in the title.

“I am urging all people concerned to avail of the amnesty offered by BIR as the deadline is fast approaching on June 14, 2021. Apply for amnesty now. It’s not easy because if you have several lands, the obligation will be consolidated. An heir can apply for estate tax amnesty and pay to the bank. If the application for amnesty is approved, the heir shall pay to the bank and file it back to the BIR,” Darcera said.