DOF, BSP making joint push for lifting of bank secrecy in tax amnesty bill

Date Posted : October 9, 2019

DOF, BSP making joint push for lifting of bank secrecy in tax amnesty bill

Date Posted : October 9, 2019

The Department of Finance (DOF) and the Bangko Sentral ng Pilipinas (BSP) will jointly ask legislators to ensure that the congressional approval of a general tax amnesty law will also enable the government to finally break the walls of bank secrecy in fraud cases.

Finance Secretary Carlos Dominguez III said BSP Governor Benjamin Diokno has informed him that the central bank wants to get involved in efforts to convince the Congress that lifting bank secrecy law is a crucial and indispensable part in the grant of amnesty to erring taxpayers.

The Philippines and Lebanon are the only countries in the world that still implement stringent bank secrecy laws.

Dominguez directed Finance Undersecretary Gil Beltran to ensure that the Congress is aware of the joint DOF-BSP position on the issue.

“Make sure that the general amnesty and the lifting of the bank secrecy—it has to be together,” Dominguez told Beltran during a recent DOF Executive Committee (Execom) meeting.

Package 1B of the Duterte administration’s comprehensive tax reform program (CTRP) covers the proposed general tax amnesty along with the lifting of bank secrecy laws and the automatic exchange of tax information among regulatory agencies.

It also includes a proposal to adjust the Motor Vehicle Users’ Charge (MVUC).

Republic Act (RA) No. 11213 or the Tax Amnesty Act was signed into law by President Duterte last February, but he vetoed a provision granting amnesty to people who failed to pay the correct taxes in 2017 and earlier because it lacked a provision on the lifting of bank secrecy. The provisions on the amnesty on delinquent estate tax taxes was retained in RA 11213.

President Duterte said a general tax amnesty without the lifting of bank secrecy laws would only lead to revenue losses for the government and encourage tax evasion.

Dominguez said the President “was constrained to veto the portion of the law covering the general amnesty because of the lack of provisions breaking the walls of bank secrecy, setting the framework for complying with international standards on exchange of information, and other safeguards against those who abuse by declaring untruthful assets or net worth.”

In his veto message, President Duterte said “our experience with the 2006 tax amnesty under RA 9480 has shown that without safeguards and measures against tax evasion, the objectives of an amnesty such as raising revenues and expanding the tax base cannot be fully achieved.”

Dominguez said that had the President not vetoed the general tax amnesty provision, the law would raise only P6.8 billion in additional revenues in 2019, lower than the estimated P13.6 billion if lifting bank secrecy and allowing the automatic exchange of information were already in place.

He said indirect revenue losses resulting from enforcement activities would be around P53 billion if the general tax amnesty had pushed through without the safeguards.

Lifting bank secrecy and allowing the automatic exchange of information, however, would have generated up to P76.6 billion in direct and indirect revenues in the next five years, Dominguez said.


-oOo-

Date Posted October 9, 2019

More on TaxReform News

Miss Earth Philippines backs fuel tax hike →

Date Posted: August 24, 2017

The Department of Finance (DOF) has found a new champion in the person of Miss … Continue reading Miss Earth Philippines backs fuel tax hike

DOF thanks Congress for ratifying TRAIN →

Date Posted: December 14, 2017

Finance Secretary Carlos Dominguez III has thanked the Congress for ratifying the Tax Reform for … Continue reading DOF thanks Congress for ratifying TRAIN

WE RECOMMEND

Economic managers propose 4 legislative ‘imperatives’ to ensure strong, sustainable, resilient PHL recovery

Date Posted: June 8, 2020

President Duterte’s economic managers are pushing four legislative “imperatives” that include revitalizing the agriculture sector … Continue reading Economic managers propose 4 legislative ‘imperatives’ to ensure strong, sustainable, resilient PHL recovery

Join our mailing list for news and information about tax reform #TaxReformNow
The Department of Finance (DOF) is the government’s steward of sound fiscal policy. It formulates revenue policies that will ensure funding of critical government programs that promote welfare among our people and accelerate economic growth and stability. Read More..

Department of Finance | TaxReform

BSP Complex, Roxas Blvd., 1004 Metro Manila, Philippines
(+632) 8525.0244
Scroll Up