Estate Tax Now At A 6% Flat Rate
Taxes and yearly budgets — two of the rather long list of issues that the Philippine government must deal with.
This year, Finance Secretary Carlos Dominguez has revealed one way he and his constituents plan to address these issues: imposing a flat rate of 6% on estate tax.
In the Philippines, estate tax is defined as "a tax on the right of the deceased person to transmit his/her estate to his/her lawful heirs and beneficiaries at the time of death and on certain transfers, which are made by law as equivalent to testamentary disposition."
This change will be only one of the many modifications included in the government's comprehensive tax reform program to be implemented in 2018. The program was developed to bolster the government's current efforts in identifying and charging tax evaders, while easing the financial burden on taxpayers with liabilities.
The new 6% flat rate will prove to be a significant change considering that in the past, the country's estate tax scheme dictated that some estate taxes be as high as 20%.
With this tax reform program, estates with a net value of P5 million will not be subjected to estate tax, while those with a net value over P5 million will be taxed at 6%, and estates amounting to P10 million or more will be exempted.