(Photo courtesy of Senate)
MANILA – The Department of Finance (DOF) has opposed a proposal allowing heirs to settle estate taxes through a single assessment for properties passed down across several generations, citing potential revenue losses and complications in verifying ownership.
During the Senate Committee on Ways and Means hearing on Friday, DOF Assistant Secretary Euvimil Nina Asuncion emphasized that estate taxes must be paid for every transfer of inheritance, even when properties remain registered under deceased grandparents or great-grandparents.
“We need to impose the amnesty tax at each level,” Asuncion told the committee chaired by Senator Panfilo Lacson.
She explained that estate tax applies to the transfer of property ownership rather than the property itself, making each inheritance a separate taxable transaction.
Asuncion noted that the DOF had opposed a similar provision in the original Tax Amnesty Act of 2019, which was eventually vetoed by former President Rodrigo Duterte.
“The revenue that will be lost would be so much also if we allow the one-time settlement,” she said.
Meanwhile, Tax Management Association of the Philippines (TMAP) president Martin Ignacio Mijares proposed allowing heirs to submit a single consolidated estate tax amnesty application while paying the required taxes for each generation.
“It’s just one application and one set of documents,” Mijares said.
He explained that families whose properties remain registered under long-deceased relatives often face difficulties preparing separate applications and documents for every succeeding generation.
However, former Bureau of Internal Revenue (BIR) Commissioner Kim Henares warned that combining multiple estates could complicate the identification of legal heirs and verification of property ownership.
Henares pointed out that different generations may have different beneficiaries and inherited assets, requiring individual estate assessments.
Instead, she suggested allowing simultaneous filing of separate estate tax applications to shorten processing time while preserving the ownership records required by the Land Registration Authority.
Senate President Sherwin Gatchalian acknowledged the difficulties faced by families and urged the DOF and BIR to explore simpler procedures for settling inherited properties.
Asuncion clarified that under the Ease of Paying Taxes reforms, taxpayers may already select the BIR Revenue District Office that will handle their estate tax applications, although separate documentation is still required for each estate.
Henares also stressed that paying national estate taxes does not automatically settle unpaid local transfer taxes and property registration fees.
The DOF said it had previously encouraged local government units to provide corresponding transfer-tax relief, but such measures would require the passage of local ordinances.
The Senate committee continues to review proposals aimed at simplifying estate tax settlements while protecting government revenues.
