WHEREAS,
the Bureau of Internal Revenue has launched an extensive and
thorough investigation of income tax returns for the purpose of
ferreting out individuals who have under-declared their net
taxable income for the years 1974 to 1979;chanroblesvirtualawlibrary
WHEREAS, individuals who, after investigation, are found to have
incorrectly paid their income tax liabilities for the aforesaid
years through deliberate of failure to report taxable income,
willful understatement of gross income or intentional filing of
claims for fictitious deductions or exemptions, will be
assessed the 50% fraud penalty and thereafter will be
prosecuted for purposes of seeking their conviction; chanroblesvirtualawlibrary
WHEREAS, there is a substantial number of individuals who have evaded
payment of income taxes and who are now amenable to the filing of
amended tax returns where they will voluntarily declare their
true and correct taxable income if given the opportunity to do so
without the payment of the corresponding surcharges, penalties
and interests; chanroblesvirtualawlibrary
WHEREAS, there is an urgent need to up-date the government's
statistics on the assets, liabilities and net worth of taxpayers
in the country for purposes of tax and economic development
planning.
WHEREAS, the statement of assets, liabilities and net worth filed
by taxpayers under Presidential Decrees Nos. 379 and 631 is
considered by the government for tax purposes, as
their true and accurate net worth as of January 1, 1974 and any
unexplained increase in their respective net worth after that
date shall be presumed as taxable income in the year when such
increase occurred, was established or discovered.
NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the
Philippines, by virtue of the powers in me vested by the
Constitution do hereby order and decree: chanroblesvirtualawlibrary
Section 1. Voluntary Disclosure of Correct Taxable
Income. — Any individual who, for any or all of the taxable years
1974 to 1979, had failed to file a return is hereby, allowed to file a
return for each of the aforesaid taxable years and accurately
declare therein the true and correct income, deductions and
exemptions and pay the income tax due per return. Likewise, any
individual who filed a false or fraudulent return for any taxable
year in the period mentioned above may amend his return and pay
the correct amount of tax due after deducting the taxes already
paid, if any, in the original declaration.
Section 2. Coverage. — The provisions of this Decree
shall apply income tax liabilities covering the period 1974 to
1979, inclusive, except the following:cralaw:red
a. Criminal cases already filed in Court or with the
Fiscal's Office on or before the effective date of this Decree;chanroblesvirtualawlibrary
b. Income tax cases involving civil liability which
are the subject of a pending criminal action in the Fiscal's
Office or the Court prior to the effectivity of this Decree;chanroblesvirtualawlibrary
c. Withholding tax at source liabilities provided for
in Sections 53, 54 and Chapter XI of Title II of the National
Internal Revenue Code; and
d. Deficiency income taxes assessed on or before the
effectivity of this Decree.
Section 3. Time and Manner of Filing of Return and
Payment of Tax. — The income tax return, amended or original, shall be
filed and the tax due thereon paid in the same manner as provided for
under the pertinent provisions of the National Internal Revenue
Code and Regulations, on or before March 15, 1981.
Section 4. Payment of Tax on Installment. — If the
tax due exceeds P50,000, the same shall be paid in accordance
with the following schedule:cralaw:red
a. If the amount due exceeds P50,000 but does not
exceed P200,000, the tax may be paid in two equal installments,
the first installment to be paid upon the filing of the return
and the second installment, on or before May 15, 1981.
b. If the amount due exceeds P100,000, the tax may be
paid in three equal installments as follows:cralaw:red
i) The first installment shall be paid upon the
filing of the return;chanroblesvirtualawlibrary
ii) The second installment shall be paid on or before
May 15, 1981; and
iii) The third installment shall be paid on or before
June 15, 1981.
c. If any installment payment is not paid on the due
date of said installment, the whole unpaid amount will become due
and demandable and shall be subject to interest and penalties imposed
under the Tax Code. The corresponding letter of demand and
assessment notice shall immediately be issued for the collection
of the amount due and increments thereon.
Section 5. Immunity from Penalties. — Any individual
who voluntarily files a return under this Decree and pays the
income tax due thereon shall be immune from the penalties, civil
or criminal, under the National Internal Revenue Code arising
from failure to pay the correct income tax with respect to the
taxable years for which an amended return was filed or for which
an original return was filed in cases where no return has
been filed for any of the taxable years 1974 to 1979: Provided,
however, That these immunities shall not apply in cases where the
amount of net taxable income declared under this Decree is
understated to the extent of 25% or more of the correct net
taxable income. chanroblesvirtualawlibrary
Section 6. Filing of net worth statement. — (a)
Persons required to make a statement of net worth. All
individuals, whether a citizen residing in the Philippines or
abroad or any alien residing in the Philippines owning
assets and/or properties amounting to P50,000 or more as of
December 31, 1979 and who is not required to file a statement of
assets, liabilities and net worth under Republic Act No. 3019, as
amended by Presidential Decree Nos. 677 and 1288 shall file a
sworn statement of assets, liabilities and net worth as of December 31,
1979. chanroblesvirtualawlibrary
(b) When and where to file. — The statement of
assets, liabilities and net worth as of December 31, 1979 shall
be filed in the form prescribed on or before April 15, 1981. The
statement of assets, liabilities and net worth shall be filed with the
Commissioner of Internal Revenue, Regional Director, Revenue
District Officer, Collection Agent or the authorized
Municipal Treasurer who has been designated as collection officer
of the Bureau of Internal Revenue, where the taxpayer has his
legal residence or place of business in the Philippines, or if he
has no legal residence or place of business in the Philippines,
then with the Commissioner of Internal Revenue. In the case
of non-resident citizens, they may file their statement with the
nearest consular office in the foreign country where they reside
or may file the statement directly with the Commissioner of
Internal Revenue.
Section 7. Valuation. — (a) Assets. — The value of
the assets, whether real or personal shall be the cost thereof if
acquired by purchase or the fair market value as of the date of
acquisition if acquired by exchange or by gratuitous title. If
the property is used in trade or business, the depreciated value
as of December 31, 1979 shall be included in the statement. In
the case of assets already declared in the statement of assets
and liabilities filed by the taxpayer pursuant to Presidential
Decree No. 379 or 631. The value of such assets as declared
therein shall be used. chanroblesvirtualawlibrary
(b) Liabilities. — Only liabilities and enforceable
obligations reducible in sums of money as of December 31, 1979
shall be included in the statement.
Section 8. Unlawful divulgence of information. — (a)
No information contained in the statement herein required shall
be published except in the form of tabulations and summaries
having no specific reference to the individual filing the
statement. chanroblesvirtualawlibrary
(b) Except for internal revenue tax purposes, it
shall be unlawful for any officer or employee of the Bureau of
Internal Revenue or any government entity having knowledge of
such declaration of assets, liabilities and net worth to disclose
to any person any information relative to such declaration and
any violation hereof shall subject such offender to a fine in the
amount of not less than five thousand pesos or imprisonment
for not less than two years, or both, and shall be
summarily dismissed from the service for cause. chanroblesvirtualawlibrary
Section 9. Penalty for filing false or fraudulent
returns. — Any individual who is subsequently found to have
willfully filed false or fraudulent amended return in cases where
an original return has already been filed, or original return in
cases where no return had been filed for any of the taxable years
1974 to 1979, shall be subject to the penalties prescribed under
Section 73 of the National Internal Revenue Code.
Section 10. Penalties for failure to file statement
or rendering false or fraudulent statement. — Any individual required
to file the statement of assets, liabilities and net worth under
this Decree who knowingly makes a false declaration or who
deliberately fails to comply with any of the provisions hereof, shall
upon conviction pay a fine of not less than Five Thousand
Pesos (P5,000.00) and imprisonment of not less than two (2)
years.
Section 11. The Ministry of Finance shall, upon the
recommendation of the Commissioner of Internal Revenue promulgate
the necessary rules and regulations for the effective
implementation of the provisions of this Decree.
Section 12. Effectivity. — This Decree shall take
effect upon approval. chanroblesvirtualawlibrary
Done in the City of Manila,
this 17th day of September, in the year of Our Lord, nineteen
hundred and eighty.
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