IT’S a no go as far as waiving the penalties slapped on motor vehicle dealers and owners for their failure to pay the appropriate excise tax, after Congress thumbed down the Bureau of Customs’ (BOC) version of a tax amnesty program.
Department of Finance (DOF) Undersecretary Carlo Carag told reporters that the proposed voluntary disclosure program (VDP) would no longer push through, as lawmakers insist that “waiving the interest and penalties is no longer within the power” of the DOF and BOC.
“They had an impression that VDP is tantamount to [an] amnesty program, which could only be done through legislative enactment,” Carag said.
“But our position is that the VDP is an abatement program whereby car owners and dealers with deficiency in taxes are given an opportunity to pay their arrears, and thus avoid criminal prosecution for tax evasion,” he said.
The VDP is a counterpart to the Bureau of Internal Revenue’s tax abatement scheme, the official said.
Customs Commissioner Angelito Alvarez earlier said the BOC charges about P30,000 to P100,000 in excise tax on all imported cars.
Under the proposed VDP, surcharges and penalties would be dispensed with, allowing those who would avail of the program to pay only the basic tax due the government.
Under the Tariff and Customs Code, delinquent traders, importers and taxpayers are liable to pay surcharges of 25 percent to 50 percent, a 12-percent interest per annum, and penalty that could go as high as eight times the original value of the imported good at the discretion of the bureau.
Alvarez said the VDP is meant to give the erring taxpayers the “rare opportunity” to come forward and be spared from criminal prosecution.
“In so doing, we are establishing a culture among importers and car buyers to pay their respective taxes in good faith. That’s why I’d really want to push through with the program,” he said.
BOC estimates collections of least P1 billion from the VDP, which was supposed to have been implemented during the first quarter of the year.
“We would still want to push through with the program, but for the meantime our hands are tied,” Carag said.