House OKs bill reducing estate tax to uniform 6%

By Jess Diaz (The Philippine Star) Updated February 8, 2017 – 12:00am http://www.philstar.com/business/2017/02/08/1670004/house-oks-bill-reducing-estate-tax-uniform-6 MANILA, Philippines – The House of Representatives approved on second reading on Monday night a bill cutting the estate tax to a uniform six percent. The House passed another bill that grants an amnesty in the payment of estate taxes for 2016 and prior years. Under the Internal Revenue Code, the tax on inherited properties range from a low of five percent to a high of 20 percent, depending on the value of the assets. The approved measure on reduced estate tax is a consolidation of several bills. Among its authors are Jesulito Manalo of party-list group Angkla, Angelita Tan of Quezon and Robert Ace Barbers of Surigao del Norte. Manalo said the present rate of 20 percent is “so prohibitive that heirs of assets resort to other means of transferring such properties in their name.” Either that or the heirs use or enjoy such assets without paying the proper tax, he said. Barbers said many heirs “convert the assets to cash” so they could no longer be traced and taxed. The Committee on Ways and Means has endorsed a companion bill that would cut donor’s tax also to six percent, from a high of 20 percent. Finance Undersecretary Karl Kendrick Chua has told the committee that the Department of Finance (DOF) supports the reduction in both estate and donor’s tax. He said the DOF wants to standardize the estate and donor’s tax and capital gains tax at six percent. This would entice more people to declare the properties they sell or inherit and pay taxes on them, he said.