Representative Ma. Theresa Bonoan of the National Unity Party is pushing several amendments to the Tax Code to make it easier for heirs to pay the gross estate taxes on properties, which, in turn, would help Government increase revenue collections.
Bonoan said her proposal would encourage more heirs of deceased property owners to remit the correct estate taxes to the government since the payments would be successive instead of requiring them to shell out the tax amount in one haul.
"This means the heirs can pay first the estate tax on one property to be able to cause the transfer of the said property to the heirs or one of the heirs, or for the latter to be able to sell the same and the proceeds to be used as payment for the other estate tax, and so forth," said Bonoan, who represents Manila’s 4th district.
Her proposal is detailed under House Bill 3865, which aims to amend Section 91 of Republic Act 8424, otherwise known as the Tax Reform Act of 1997 or the National Internal Revenue Code.
The amendment provides that "If the immediate payment in full of the gross estate tax as may be charged on the estate left by the decedent, would impose undue hardship and difficulty upon the estate or any of the heirs, the gross estate tax charged may be computed per property and that the heirs may then be allowed to pay the said estate tax per property and successively."
The bill, now pending at the House Committee on Ways and Means chaired by Rep. Romero Quimbo (2nd District, Marikina City) further provides that "The total amount of the gross estate tax as computed on all the properties covered by the estate must be completely settled within 10 years, in case the estate is settled through the courts, or seven years in case the estate is settled extra judicially."
Bonoan said her proposed law would help the government improve collections from estate taxes, which remains one of the lowest contributors to the national treasury.
In 2010, the Bureau of Internal Revenue collected only P1.3 billion in estate taxes, representing about a tenth of one percent of the total tax collection of P822.6 billion, Bonoan noted.
BIR Commissioner Kim Henares earlier announced that the bureau aims to collect P50 billion in estate taxes from 2013 to 2016.