Presidential Decree No. 68, dated November 24, 1972

December 8, 1972 REVENUE REGULATIONS NO. 14-72 SUBJECT : Presidential Decree No. 68, dated November 24, 1972, Proclaiming the Condonation of Delinquent Tax Accounts and Tax Amnesty on Contested Assessments Subject to Certain Conditions TO : All internal revenue officers and others concerned SECTION 1. Scope . Pursuant to Presidential Decree No. 68, dated November 24, 1972, the subject matter of which is the "Condonation of Delinquent Accounts and Tax Amnesty on Contested Assessments Subject to Certain Conditions", the following regulations providing for the implementation of the said decree are hereby promulgated and shall be known as Revenue Regulations No. 14-72. SECTION 2. General Provisions . (a) All unpaid delinquent tax accounts as of November 24, 1972 amounting to one hundred pesos (P100) or less are hereby condoned. (b) In case of all delinquent tax accounts which remain unpaid involving an amount exceeding one hundred pesos (P100.00) including all unlisted and/or current tax accounts resulting from assessments and/or letters of demand already issued as of November 24, 1972, and/or such accounts which are protested and/or contested, the final resolution of which are still pending in the Bureau of Internal Revenue and/or in courts shall be reduced: (1) By 40% if said delinquent tax account is paid in full on or before January 31, 1973; (2) By 20% if said delinquent tax account is paid in full on or before February 28, 1973. (c) In case the amount of unpaid delinquent account exceeds P300,000.00, the taxpayer may avail of the concessions under items (a) and (b) and at his option, the same may be paid in two installments, the first to be paid on or before the dates under items (1) and (2) as the case may be and the second installment not later than May 15, 1973. SECTION 3. Definition of Terms . (a) Unpaid delinquent Tax Account . The term "unpaid delinquent tax account" means an account appearing in the IBM lists of the Bureau of Internal Revenue as of November 24, 1972, or an account, although unlisted, has been demanded in a letter of demand or assessment notice issued on or before November 24, 1972. It shall include the tax proper, surcharges, interests accruing as of November 24, 1972, and penalties. (b) Protested Tax Account . A protested tax account is an account being disputed by the taxpayer who, after receiving an assessment notice or letter of demand, submits a protest in writing stating the reason or reasons why he is protesting the amount being demanded from him. (c) Contested Tax Account . A contested tax account is one being disputed in court. SECTION 4. Unpaid Tax Accounts That Are To be Condoned . All unpaid tax accounts involving amounts of P100.00 or less as of November 24, 1972 are condoned. This refers to every individual unpaid tax account of a taxpayer in the amount of P100.00 or less as appearing in the records of the Bureau whether listed or not in the DPC delinquency list. SECTION 5. Unpaid Tax Accounts That Are Subject to Amnesty . Unpaid tax accounts involving amounts of more than P100.00 remaining unpaid as of November 24, 1972 are subject to amnesty under Presidential Decree No. 68. These unpaid tax accounts include the following: a. Listed accounts in the DPC delinquency list and are not the subject of any protest; b. Accounts not listed in the DPC delinquency list but have been demanded or assessed and are not the subject of any protest; c. Listed or unlisted accounts being protested, and/or contested administratively in the Bureau of Internal Revenue; d. Listed or unlisted accounts being contested in courts; e. Listed or unlisted accounts which are subject of collection by summary remedies or court action; f. Second installments on income tax for the years 1967, 1968, 1969, 1970 and 1971 already listed by the Data processing Center or Regional Office; and g. Taxes paid by dishonored checks as of November 24, 1972. SECTION 6. Protested or Contested Assessments . In case of unpaid tax accounts resulting from assessments and/or letters of demand already issued as of November 24, 1972 and/or such accounts which are protested and/or contested, the final resolution of which is still pending in the Bureau of Internal Revenue and/or in Courts, the proceedings thereon at any stage shall be suspended up to February 28, 1973, except those which are to prescribe on or before said date, the collection of which shall continue until paid, in order to afford the taxpayer the opportunity to avail of the concession granted above. SECTION 7. Unpaid Tax Accounts That May Not Be Condoned Or Be the Subject of Amnesty . Income taxes withheld on salaries and wages of employees by their employers, taxes withheld by disbursing officers of the government agencies, government owned or controlled corporations under R. A. No. 1051, and income taxes withheld at source pursuant to Section 53 of the National Internal Revenue Code which were not remitted to the Bureau at the time they become due and consequently, became delinquent as of November 24, 1972 are not covered by Presidential Decree No. 68 and cannot be the subject of condonation or amnesty under said decree. SECTION 8. Extent of Amnesty . The amount of unpaid tax account enumerated in Section 5 hereof including surcharge and interest computed from the date of demand and/or assessment up to November 24, 1972 shall be reduced by 40% if paid in full on or before January 31, 1973 or by 20% if paid in full on or before February 28, 1973. To illustrate: a. The deficiency income tax liability of Jose Santos in 1968 was assessed as follows: Basic Tax Due P 200.00 Deficiency Interest 14.00 Total Tax Due P 214.00 ======= Date assessment was issued June 15, 1970 Due Date July 15, 1970 Mr. Santos failed to pay the deficiency assessment up to the issuance of Presidential Decree No. 68 on November 24, 1972. If he pays the tax on or before January 31, 1973 and desires to avail of the amnesty, the amount shall be computed as follows: Tax Due on 7/15/70 P 214.00 5% surcharge on P200.00 10.00 1% interest from 6/15/70 to 11/24/72 on P214.00 62.13 Total amount due on 11/24/72 P 286.13 Less: 40% thereof 114.45 Amount to be paid on or before January 31, 1973 P 171.68 ======= b. If the delinquent account is for the underpayment of C-8 for 1970, demanded on November 15, 1972, as follows: C-8 due for 1970 P 500.00 C-8 paid 300.00 Deficiency P 200.00 25% surcharge 50.00 Total Amount Due P 250.00 ======= If the taxpayer pays on February 28, 1973, the amount he shall pay is computed as follows: Tax due including surcharges P 250.00 Less: 20% thereof 50.00 Amount to be paid on Feb. 28/73 P 200.00 ======= SECTION 9. Installment Payments of Unpaid Tax Accounts Which Exceed P300,000 . 00 . If the unpaid tax account involves an amount exceeding P300,000 before computation of delinquency penalties and interest up to November 24, 1972, the reduced amount as computed in accordance with the procedure in Section 8 of these regulations may be paid in two installments as follows: a. If the original unpaid tax account, including delinquency penalties and interest is reduced by 40%, the first installment shall be paid on or before January 31, 1973; if the original unpaid tax account, including delinquency penalties and interest is reduced by 20%, the first installment shall be paid on or before February 28, 1973. b. The second installment equivalent to one-half (1/2) of the reduced amount shall, in both cases, be paid on or before May 15, 1973. If the second installment is not paid on or before May 15, 1973, the first installment which was already paid shall be applied as partial payment of the original unpaid tax accounts as if the same had not been reduced. In such case, the balance shall be collected by court action, summary proceedings, or simultaneously. SECTION 10. How to Avail of the Amnesty . (a) Unpaid Delinquent Tax Account in excess of P100 . 00 . A taxpayer who wishes to avail of the amnesty under Presidential Decree No. 68 should go to any of the following offices: 1. Tax Accounts Division, Room 317, Third Floor, Finance Building, Manila 2. Office of the Collection Branch in the Revenue Regional Office having jurisdiction over his tax case. 3. Revenue District Office having jurisdiction over his tax case. 4. Office of the Collection Agent of the City or municipality where he is residing or holding office. He should present to the official or employee concerned the Notice, Demand, or Computation received by him and pay to said official or employee the amount due computed in accordance with the provisions of this regulation, or if the tax is one payable thru banks, he should secure from the official or employee concerned the required Tax Payment Acceptance Order (TPAO). If the taxpayer cannot present a notice or demand, the delinquency listings of the Data Processing Center may be referred to for the determination of the amount due from the taxpayer, to which should be added the surcharge and interests that had accrued as of November 24, 1972. SECTION 11. Effects of availing of the tax amnesty . If the taxpayer makes full settlement of his delinquency tax account in the manner prescribed in these regulations, he is relived of any criminal or administrative liability insofar as said delinquency tax account is concerned. SECTION 12. Effect of failure to avail of tax amnesty . If a taxpayer having an unpaid delinquent tax account does not avail of the amnesty granted by Proclamation No. 68, dated November 24, 1972, by paying the amount as reduced under these regulations, such delinquent tax account shall be considered final, executory and demandable and the same shall be collected by court action, by distraint and levy or both, simultaneously. SECTION 13. Effectivity . The provisions of these regulations are effective immediately. CESAR VIRATA Secretary of Finance Recommended by: MISAEL P. VERA Commissioner of Internal Revenue