Bill Filed By Solon Seeks to Abolish Estate Tax in the Philippines

Filipinos May Get Relief from Paying Estate Taxes If Bill Gets Approved

A bill has been filed by Albay Representative Raymond Adrian Salceda that seeks to abolish the estate tax in the Philippines. The reason to push this measure through is that the levy is more damaging to the national economy than the benefits the revenue offers. In this article, let’s talk about why this bill should be passed and turned into law.

​What Is House Bill 6553?

The House Bill 6553 seeks to scrap the estate tax in the country, so families or heirs no longer need to pay estate taxes upon inheriting properties from deceased parents. Rather, the deferred tax will only be applied when the inherited property is sold and will be included in the capital gains tax. According to Salceda, delayed property transfers have a massive economic impact of up to PHP 78 billion, making the PHP 14 billion annual collection from estate taxes negligible.
He explained that such delays only hinder the immediate transfer of titles, causing idle lands and preventing financial institutions from lending. In addition, the estate tax adds more burden to grieving families upon the death of a member. Instead of pressuring them to pay the tax, they should be given time to grieve.

Administrative Procedures Be Simplified

Another purpose of the proposal is to simplify administrative processes when transferring land titles after the death of the owner. Therefore, once the bill is approved, the Estate Tax Clearance Certificate for land transfer will not be necessary anymore. The E-CAR will only be required during the first sale of the property.

In 2023, it can be recalled that a bill was also proposed to extend the estate tax amnesty deadline to help families settle pending tax balances and estate transfers. And now, there is a possibility that the tax will be totally abolished as solons urge to pass Bill 6553 in the Senate. This reform is expected to be neutral in terms of revenue that will be generated and is likely to boost collections as cooperation from land owners improves over time.
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Through the years, families have been burdened by estate taxes that must be settled after the original title owner has passed. This is a bit harsh for poor families without the money to pay the tax so they can transfer the property among beneficiaries. If the bill is approved, many Filipinos will benefit as they can easily transfer their estate to the new owner.

Final Thoughts

While many families struggle to settle their estate taxes, more Filipinos are still unaware of the tax they need to pay upon the death of their parents whose name is on the title. This needs a little more support from the government to help simplify land transfer and boost the economy for the benefit of all. If you’re searching for a new investment in real estate, you can visit REALS.PH for the best properties for sale, including house and lot in Baguio City and other prime locations nationwide.