By Deputy Speaker and Batangas Rep. Ralph G. Recto

15 May 2023

Ginoong Speaker, mga katrabaho sa bulwagang ito:

Mother’s Day po kahapon. 

And mothers who have passed to the Great Beyond are deeply missed, lovingly remembered, Mother’s Day or not.

Their memories are cherished, teachings still heeded, and the material wealth they left behind treasured.

Unless of course, in the case of properties, the estate has not been settled, making these fruits of their lifetime of labors unenjoyed by the loved ones to whom these have been bequeathed.

Bungalow man o bahay kubo, ekta-ektarya man ang lupain o sakto lang para sa isang payak na tirahan, may prosesong sinusunod upang legal na maisalin ang ari-arian sa mga naiwang mahal sa buhay.

But the desire to settle inheritances has been curbed by a combination of factors preventing heirs to make use of or make the most of these legacies.

One deterrent has been the complicated process, daming pipirmahang papeles sa maraming opisina. 

Ask heirs who have executed extrajudicial settlements, and they would tell you that what they have experienced is the bureaucratic equivalent of Survivor meets Amazing Race.

Second is the cost. The truth is that if the dead bestow wealth, such bequeathment comes with taxes to be paid.

Thankfully, the Congress over the past five years has passed three laws which cut, not only the amount of estate taxes, but simplified the rates. 

Culture also plays a part. Dito po sa atin, estate settlement is not part of the grieving process. 

It is frowned upon as dishonoring and disrespecting the dead. 

Ang Philippine Statistics Authority na rin po ang nagsabi. There were only 8 estate tax filings for every 100 deaths reported from 2011 to 2013.

But prolonged bereavement punishes the living, in surcharges imposed by the government when settling the estate is delayed, and this in turn triggers more deferment.

That is why Congress passed two laws to reduce the pain in paying estate tax and at the same time allowing government to gain revenues.

Ang una ay ang RA 10963, na merong dedicated section sa estate tax.

Ang dating 6 tax brackets, na mula 5 % to 20%, ginawang isa na lang ng RA 10963 — 6%.

Halimbawa, kung ang estate ay over P2 million but not over P5 million, ang estate tax ay P135,000 plus 11% of the excess over P2 million.

Kung dati, only family homes valued at not over P1 million ang tax-exempt, sa bagong batas itinaas ito sa P10 million.

At ang standard deduction ay itinaas sa P5 million — ibig sabihin kung ang halaga ng estate ay mas mababa rito, walang buwis na babayaran.

Hinabaan rin ang window kung kelan pwede bayaran ang tax.

Ngunit hindi sapat na rebisahin lamang ang taripa ng bayarin. Paano naman ang mga penalties kung deka-dekada nang lumisan ang may-ari?

Tama kasi ang pangamba na ang kaltas sa buwis, kakabigin din ng multa.

Kaya naman ipinasa ng Kongreso ang Republic Act 11213, na nag-uutos ng pagbura ng mga surcharges.

This was signed into law on the day significant to mothers — on Valentine’s Day of 2019.

Ito ang popular na tinaguriang Estate Tax Amnesty Law. Ayon sa batas na ito, maaaring mag-file ng estate tax amnesty hanggang June 14, 2021.

At dito na po pumasok ang panglimang C na balakid sa estate tax: ang Covid.

The world’s longest and most brutal pandemic lockdown wreaked havoc on amnesty applications.

Like everything else, it also became a casualty of Covid. 

Halimbawa, marami sa ating mga kababayan sa ibang bansa na nais sanang ayusin ang namana nilang ari-arian ang hindi makauwi dahil sa matagal at mahigpit na lockdown.

At dito to the rescue na naman ang Kongreso. 

In the midst of the pandemic, it passed its third estate tax related law in as many years, RA 11569, which extended the amnesty period by two years, to June 14, 2023.

But the extended period was marred by two Covid waves, the lethal Delta on the second half of 2021, and Omicron on the first semester of 2022.

These curb the enthusiasm of those who would like to apply for estate tax penalty forgiveness.

Hence, this appeal for another law, extending anew by two years the period of availment.

I maintain, Mr. Speaker, that an extension is a lifeline to a government scrounging for revenues and an act of kindness to seniors.

I am speaking of demographic whose vulnerability during the 30 months the pandemic raged turned their homes into prison.

As society opens and restrictions are lifted, people are now free to move around, but for those with pending estate tax obligations, what good does such normalcy bring when the tax relief offered has expired? 

Extending the effectivity of the law will save families billions and earn for the government billions.

The latter cannot argue against it as it is far from reaching its projected P50 billion collection goal from the program.

This bill should be viewed as a pandemic response measure, giving relief without bloating the debt or ramming down new taxes.

Come to think of it, my dear colleagues: If government had extended lifelines, bailouts in the billions to distressed commercial firms during the pandemic, then why should not the same compassion be extended to families, more so that it won’t cost the government anything?

Mr. Speaker, I said we have passed three laws on the same subjects. And that this will be the fourth.

Let me correct myself, Mr. Speaker.

In truth, this will be the fifth because the fourth one was, thanks to your guidance, the bill condoning land acquisition debts of land reform beneficiaries.

In House Bill 6336, which has been dispatched to the Senate, with the gentle note “Please expedite”, it stipulates in Section 8 that “agrarian reform lands of ARBs, as estates, shall be exempt from the payment of estate tax.”

That, furthermore, estate tax returns already filed with the Bureau of Internal Revenue shall not be subject to estate tax and penalties arising therefrom.

Mr. Speaker.

Ang kagandahan rin po ng bill na ating ipapasa ay pinalawig nito ang cut-off date kung kelan po namatay ang isang taong nag-iwan ng ari-arian.

Sa ilalim ng RA 11213, only deaths on or before December 31, 2017 are covered. We have moved this reckoning date up to December 31, 2021, to include pandemic casualties.

Mr. Speaker:

Ang salitang “amnesty” po ay galing sa Greek word na amnestia, meaning oblivion, or to forget. 

But RA 11213 clearly defines instances in which the tax amnesty is not applicable.

Thus, I would like to debunk conspiracy theories that this bill is tailor-made for certain personalities. It can never be.

In closing, I hope my former classmates in the other House will not consign this to oblivion as the current deadline expires in about a month.

The clock is ticking.

I vote ‘Yes’,  Mr. Speaker.