If you’ve been following the news recently, you would know that Congress unanimously approved House Bill No 4814.
Anyone who owns real estate properties will find this significant to them since it is a tax amnesty on real estate taxes.
Before delving into the content of the bill, it is noteworthy to explain certain legal concepts.
What is Estate Tax?
Estate tax is the tax on the right to transmit property at death and on certain transfers by the decedent during his lifetime, which are made by the law equivalent of testamentary dispositions.
What is a Tax Amnesty?
Since “Taxes are the lifeblood of the government, and without taxes, the government can neither exist nor endure”, there are only certain instances where the government will forgo the collection of it.
A tax amnesty is a prime example of the government (through the legislature) deciding that it will not pursue the collection of taxes.
It is interesting to note that under our Constitution, it is Congress that wields the power of the purse–thus, it is also fitting that only they have the power to declare a tax amnesty.
The last amnesty in recent memory would be Republic Act №9480, which was an amnesty on all unpaid taxes due to the national government from 2005 and prior years. Weirdly enough, Republic Act №9480 contained an explicit moratorium with regard to tax amnesty, as found in Section 11 of the law.
However, constitutional law provides that the power of Congress to legislate is plenary–and by nature of that plenary power, non-repealable laws are not allowed to be passed.
Tax amnesty laws by nature are helpful to the taxpayer; however, as the Latin saying goes: “Timeo Danaos et dona ferentes” (Beware of Greeks bearing gifts), a personapplying under tax amnesty laws may possibly lead to other disclosures or possibly onerous conditions.
Section 4 of the bill provides that it covers estate taxes due from 2016 and prior years, regardless of whether or not an assessment has been made.
