Editorial

Besides The Living, 

BIR Goes After The Departed

The Bureau of Internal Revenue (BIR) is set to look into the bank accounts of dead people to reach their target collection goal of P50 billion by 2016.

 
BIR Commissioner Kim Henares said they will take advantage of a loophole in the Bank Secrecy Law to check taxable inheritance and boost estate tax collections from about P1 billion a year to an average of P12.5 billion.

 
An estate tax is a tax on the right of any given deceased person to transmit wealth to heirs. It is imposed on a given heir’s inherited estate or assets if the value of the estate exceeds an exclusion limit set by law. 

 
Republic Act 1405 or the Philippine Law on the Secrecy of Bank Deposits meanwhile states that accounts cannot be disclosed by banks and may not be examined except upon written permission of the depositor or if the money involved is the subject of litigation. Henares explained that bank accounts owned by the deceased are not protected by the law on bank secrecy because obviously, they have passed away. Heirs of the deceased cannot claim to enjoy bank secrecy either because technically, they don’t own the assets of their deceased relative yet. 

 
“The BIR wants everyone to become rich, so that we can collect more taxes. If you die, and you’re rich, you pay more estate tax,” Henares said.

 
Finance Secretary Cesar Purisma meanwhile said the low, static level of current estate tax collections contradicts rising property and stock princes. 

 
Purisima also urged inheritors (surviving heirs) to amend their estate tax declaration and payments before they are caught. According to him, the government is set to investigate estate tax payments over the last five years.
OP BUDGET PROPOSAL GETS SENATE NOD

The senate committee on finance approved the proposed P2.8 billion 2014 budget of the Office of the President (OP) and recommended the same for plenary deliberations.

 
Senator Francis Escudero, chairman of the finance committee said OP’s budget proposal, presented by Exceutive Secretary Paquito Ochoa, Jr. breezed through the committee because no other member attended the hearing and no issues were raised when the executive office presented its budget proposal.

 
The senator also said that traditionally, the OP and the Office of the Vice President, respectively are given due courtesies with respect to their budgets.

 
“There is no reason to stall the approval for plenary of the OP budget. Congress regularly gives courtesies to the Office of the President during budget deliberations. If there are any issues in their respective administrations and offices, these are directed to the departments and not to the office proper itself.”

 
Escudero said even the lump sum amounts associated with the OP and which has been critiqued as of late belong to the special purpose funds which lie on the Department of Budget and Management’s (DBM) responsibility to defend.

 
“Even the social fund is not in the president’s budget. The DBM will defend the special purpose funds to include calamity fund, contingency fund, and feasibility studies fund; all the lump sums that are being questioned by the public and the media or even the lawmakers fall under the DBM. They will address these issues during the plenary come November” Escudero explained.

 
The senator however said that even though the president’s social fund does not go through congress, it is still subject to Commission on Audit’s (COA) rules and regulations and guidelines.

 
“It is Congress that appropriates and allocates money for the social fund of the president when we passed the PAGCOR Charter and the other revenue-generating laws and how it will be divided and sub-divided into the various agencies of the government. COA, as the central examiner of all government funds, has its rules and regulations to govern even the president’s social fund.”

 
 The budget proposal of OP is broken down as follows: Personal Services–P641.132 million; Maintenance and other operating expenses–P1.998.435 billion; and Capital outlay–P183.400 million.

 
The OP budget for 2014 is 3 percent higher than its 2013 budget which was P2.73 billion. /MP