Duterte Tells BIR: Collect Estate Tax

President Duterte wants to know why the Bureau of Internal Revenue (BIR) has not collected tax from a certain estate as the government scrounges for additional sources of revenue.

During his regular Talk to the People aired on Tuesday night, March 29, the President reminded the BIR about its mandate to collect taxes, even as he defended his decision not to stop the operation of e-sabong or online cockfighting.

Duterte’s remark came amid controversy over the unsettled estate tax liability of the family of presidential candidate Ferdinand “Bongbong” Marcos Jr. that has reportedly reached P203 billion.

Finance Secretary Carlos Dominguez III said on Wednesday, March 30, the BIR has taken the necessary steps to collect the estate taxes of the Marcos family, but the kin of the late dictator avoided making any payments while awaiting court intervention.

“I didn’t stop because the government needed money from e-sabong. I’ll make it public now, it’s P640 million a month. And in a year’s time, it’s a billion plus. Where do we find money that easily?” the President said partly in Filipino.

“In our taxation, the government can only prod. There is no need for a reminder from Malacañang. The BIR is there so let’s ask the BIR why the estate tax has not been collected until now,” he said, without naming names.

When asked whether Duterte’s statement was directed at the Marcoses, Presidential Communications Secretary and acting spokesman Martin Andanar said on Wednesday the President only reminded the BIR about its mandate.

“The President only reminded the BIR to act on its mandate and that is to collect taxes,” Andanar said at a press briefing.

Asked whether the Duterte administration sees the urgency to collect the unpaid estate tax liabilities of the Marcoses to fund the government’s pandemic response and recovery efforts, Andanar said the BIR should not only run after a certain politician or personality but all those who have unpaid taxes.

“Not just a particular politician or personality, everyone who does not pay should be chased by the BIR because our national government needs more funding,” he said in Filipino.

Dominguez said the BIR has demanded that the Marcoses to settle their estate tax backlog, especially as the government tries to raise funds for its pandemic response.

However, the taxes in question were contested in court by the Marcos family, delaying the collection efforts of the BIR to the detriment of state resources.

“BIR is collecting and has demanded payment from the Marcos estate administrators, (but) they have not paid. The BIR will continue to consolidate the titles in favor of the government on those properties which have been levied upon,” Dominguez said.

The procedure in obtaining the Marcos taxes takes time, the finance chief said, as it involves selling assets in public auctions to convert them to cash. Either way, he said the Marcoses have avoided paying their estate taxes awaiting the decision of the court.

“Bottomline, the Marcos (family) does not take any steps to settle and pay because [of] pending litigation,” Dominguez said.

The government, running on a budget deficit, requires as much revenues as it can get to reduce its dependence on borrowings in funding state services. It plans to borrow P2.47 trillion this year to cover for a deficit expected to reach 7.7 percent of the economy at P1.65 trillion.

Marcos’ camp admitted that the Supreme Court ruling on his family’s estate tax worth P23 billion is final and executory, but the surcharges for the unsettled debt over the past years could still be subject to reconciliation.

Partido Federal ng Pilipinas general counsel George Briones, in an interview with CNN Philippines, said the P23 billion has ballooned to P203 billion due to penalties and surcharges.

Duterte has not endorsed a presidential candidate in the May 9 elections, Malacañang has said. However, the PDP-Laban faction, which the President chairs, last week endorsed Marcos.

In Zamboanga City, independent presidential candidate Sen. Panfilo Lacson and his running mate Senate President Vicente Sotto III said it was about time the BIR collected the multibillion-peso tax arrears of the government.

“We are not sure about the status of the case as the lawyer of one presidential candidate claimed it remains in court. But I think from 1997 (final judgment) up to now, there’s already a resolution of the case,” Lacson told a press conference in Filipino.

Sotto said BIR officials should be alarmed and ashamed that it is the President who is prodding them to enforce the collection.

In Gitagum, Misamis Oriental, Manila Mayor Isko Moreno on Tuesday thumbed down giving a tax amnesty to the heirs of the late dictator Ferdinand Marcos Sr.

In an ambush interview, Moreno said he would rather give tax amnesties and tax holidays to pandemic-hit micro, small and medium enterprises instead of to well-entrenched families.

“Tax amnesty should be for struggling business owners. We need to help them,” he said in Filipino.

A one-page document issued by the Supreme Court 23 years ago showed that there has been a final and executory judgment on the estate tax case of the family of former senator Marcos Jr.

Income tax filing extended

The BIR has extended the deadline for the filing of annual income tax returns (AITRs) to April 18 since the traditional cutoff of April 15 falls on a regular holiday.

Under Bank Bulletin No. 2022-05, the BIR told authorized agent banks to accept tax payments last March 26 and on April 2 to make up for the two Saturdays prior to the deadline that falls on April 9, Araw ng Kagitingan, and April 16, Black Saturday.

Likewise, the BIR reminded them to extend operating hours up to 5 p.m. from April 1 to 18 since the regular deadline of April 15 falls on another holiday, Good Friday.

On the other hand, the BIR issued BB 2022-06 to refresh authorized agent banks of the policies that they need to observe during the filing period. For one, the BIR now accepts the new versions of several forms for the submission of AITRs.

Authorized agent banks were ordered to receive all tax payments made using the BIR’s official printed forms or photocopies of returns. Further, they were instructed to process tax remittances accompanied by downloaded AITRs filled out and signed by the taxpayer.

The BIR also asked authorized agent banks to make sure that pertinent portions of the income tax returns are validated by machine and details of the tax payment are imprinted on all copies.

Authorized agent banks were also tasked to accept tax payments through checks provided that the checks are payable to the BIR.

Authorized agent banks were told to facilitate the tax payments of individuals already inside the premises by the close of operating hours. They were also reminded to avoid imposing any penalties, as the BIR insisted it has the sole authority to do so.

For the year, the BIR, as the government’s lead tax agency, targets to generate a total of P2.43 trillion, more than half of which at P1.25 trillion will come from taxes on net income and prof-its.

BIR collection grew by nearly seven percent to P2.08 trillion in 2021, from P1.95 trillion in 2020, and even closed in on the pre-pandemic record of P2.18 trillion in 2019. – With Elijah Felice Rosales, Paolo Romero, Marc Jayson Cayabyab, Evelyn Macairan