Albay Representative Joey Salceda has filed a bill in the House of Representatives seeking to abolish the current estate tax, arguing that the levy causes greater economic damage to the economy than the revenue it generates.
Under the measure, heirs would no longer be required to pay an estate tax when inheriting property. Instead, the tax would be deferred and applied only at the time the property is sold, where it will be included as part of the capital gains tax.
Salceda said the estimated P14 billion collected annually from estate tax is negligible compared to the P78 billion in economic impact caused by delayed property transfers, which he attributes to the tax.
Delays prevent immediate title transfers, leaving land idle and hindering banks from lending, he explained.
He also stressed the burden on families, stating that upon a death, relatives need time to grieve, “not pressure to produce cash for a tax that appears only because someone died.”
The proposal also simplifies administrative procedures.
The Estate Tax Clearance Certificate (E-CAR) for estate transfer would no longer be required immediately, only becoming necessary at the time of the first sale.
Salceda expects the reform to be revenue-neutral and may even increase total collections over time as compliance improves.