BIR seeks to hike estate tax take

Businessworld - CONSTANT and more detailed monitoring has been pledged by the Bureau of Internal Revenue (BIR) in a bid to improve estate tax collections, which Finance Secretary Cesar V. Purisima wants raised to P10 billion from the meager P1 billion netted in previous years.
"The only way to plug the leaks in estate tax collections is for the BIR to be vigilant at the regional and district levels," BIR Deputy Commissioner Estela V. Sales yesterday said.

The most common way that taxpayers evade estate taxes is by not reporting deaths to authorities, she explained. The National Internal Revenue Code (NIRC) mandates that the estate tax return be filed within six months from the decedent’s death.

Estate taxes can be hefty, ranging from a minimum of P10,000 to more than a million pesos depending on the size of the inheritance. Only estates worth less than P200,000 are exempted.

The NIRC allows for extensions should the payment "impose undue hardship upon the estate or any of the heirs." This isn’t availed often, Ms. Sales claimed, since some taxpayers intentionally want to evade the levy.

Estate taxes have long yielded weak collections for the BIR. Mr. Purisima on Wednesday said these had brought in only some P1 billion annually.

"It has remained stagnant through the years. With inflation, the wealth of rich Filipinos should surely be increasing, as evidenced by the continued record highs in the stock exchange," he said during the BIR’s 108th anniversary celebrations.

"This should be brought up to a more respectable level of about P10 billion," he stressed.

In order to hit the target, Ms. Sales said the BIR would have to monitor civil registries, hospitals and even obituaries to track the deaths of registered taxpayers.

For latest update on real estate development and its RA 9646, the Real Estate Service Act of 2009, visit www.ra9646.com.