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DOF sweetens rules for delinquent taxpayers

The Department of Finance (DOF) has sweetened tax compliance by giving delinquent taxpayers a time to voluntarily settle their unpaid dues without questions from the taxmen.

In an effort to raise government revenues, the DOF launched the Voluntary Assessment and Payment Program (VAPP) allowing taxpayers to voluntarily pay their unpaid internal revenue tax liabilities for the taxable year 2018.

Based on Revenue Regulations (RR) No. 21-2020, the DOF now allows taxpayers’ outstanding tax obligations—with or without an ongoing audit or investigation—to be settled until the end of the year.

“Those who do so will no longer be audited or investigated for 2018 for the tax types availed,” the DOF said.

VAPP covers all internal revenue taxes due for the taxable year ending December 31, 2018, and for fiscal year 2018 ending on the last day of July 2018 to June 2019. 

It likewise covers one-time transactions (ONETT) such as the payment of estate taxes, donor’s taxes and capital gains taxes (CGT), as well as ONETT-related creditable withholding taxes (CWT) or expanded withholding taxes and documentary stamp taxes (DST).

Taxpayers who wish to avail of the VAPP must generally pay the higher of a certain percentage of 2018 gross sales or 2018 taxable net income, based on the increase or decrease in total taxes paid from taxable years 2017 to 2018, subject to minimum amounts based on subscribed capital. 

For non-ONETT withholding taxes, taxpayers must pay 5 percent of the total basic withholding tax remittance for the taxable year 2018. 

For ONETT taxes, the amount to be paid shall be the basic tax due on the unfiled tax return or unpaid tax due plus 5 percent. 

 “Details of the formula for the payment of the above mentioned tax types are specified in RR 21-2020,” the DOF said.

For taxpayers who have already settled any non-ONETT tax deficiency covering the taxable year 2018, the basic tax deficiency shall be considered as payment for 2018 in the computation of the amount of voluntary payment required under the VAPP.

This will significantly reduce the required VAPP payments for these taxpayers who have already settled their previous tax audits or investigations.

With the VAPP, the government hopes to increase its tax collections while providing taxpayers an easy and affordable way to settle their unpaid tax deficiencies.

Source: Manila Bulletin (

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