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Finance cautions House on rebate bill
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Posted on Jan 11 1999
Finance Secretary Lucy DLG Nielsen has cautioned the House of Representatives against a legislation that will correct a technical deficiency in an existing tax law, saying the proposal entails a “monstrous” task and faces potential legal dispute.
Under House Bill 11-50, a amendment to Public Law 10-75 will change its effective date to January 1, 1998, making the rebate bate increase inapplicable for tax year 1997 until the previous year.
While the bill aims to ease the computation on the rebate rates, making its retroactive would throw the Department of Finance into a difficult task of reviewing tax returns already filed, according to Nielsen.
“The intention of the bill was to alleviate the administrative nightmare in having multiple tax rebate rates applicable during the same tax year such that it creates monstrous task to implement,” the finance chief said in a letter to House members.
“The bill would have been a perfect administrative solution if enacted into law in the latter part of tax year 1997 or in early 1998 before the tax filing season,” Nielsen said, noting that it is no longer necessary.
The measure has been pending before the House Ways and Means Committee since early last year, but it recommended its passage only last November. It has yet to be acted by members of the lower chamber.
According to Nielsen, the department has completed all the tax forms and majority of the tax returns have been filed and processed for tax year 1997 which ended September that year.
She maintained that if the bill is signed into law, taxpayers will have to re-file their 1997 tax returns, while the DOF will have to undertake massive rebate adjustments on all these documents.
Nielsen said that “passing a tax law after the close of the tax year that affects tax requirements and tax liabilities of the previous year may present a serious legal issue” because they have already met their obligations as provided under existing law.
