DOF wants Congress to ease bank secrecy law
The Department of Finance (DOF) is pressing Congress to ease the bank secrecy law to enable authorities to properly look into individuals suspected of fraud.
Finance Secretary Carlos Dominguez said there is a need to lift bank secrecy for tax purposes to improve the enforcement of the law against crimes such as tax evasion and money laundering.
“It is absolutely necessary for proper tax administration and we are determined to see this passed,” Dominguez said.
“We’re just asking Congress, please give us the tools so that our tax authorities and other authorities can do their job, can pursue their job properly,” he added.
According to Dominguez, the proposed lifting of the bank secrecy law, for one, would enable the Bureau of Internal Revenue (BIR) to properly investigate taxpayers suspected of tax evasion and improve its tax collection.
“Can you imagine? (BIR deputy Commissioner) Arnel (Guballa) here, he knows that somebody is cheating on the tax and the only way he can do it is to look at the guy’s bank account but he cannot do it. We’re not asking him to look at it, you know, for curiosity or for gossip or for something,” Dominguez said.
“If we have a good suspicion that, you know, a crime is being committed, tax evasion, money laundering, that’s when we’ll look at it. But, you know how can you expect better tax collection, if you can’t?” he added.
Dominguez said he wants to have this proposed measure passed within the 18th Congress.
Moreover, Finance Undersecretary Antonette Tionko said the lifting of the bank secrecy law, as well as the proposed automatic exchange of information among tax agencies, would make the Philippines compliant with the international standards on transparency.
“It is in compliance with our international obligations,” Tionko said. “That’s why we need lifting of bank secrecy.”
According to the DOF, the Philippines and Lebanon are the only countries in the world that still implement stringent bank secrecy laws.
Earlier, the DOF said the agency, together with the Bangko Sentral ng Pilipinas (BSP) will push for legislators to ease the bank secrecy law for the effective implementation of the proposed amnesty program for taxpayers with unpaid obligations.
Dominguez said the BSP is one with the DOF in its position that a general tax amnesty program cannot be implemented without lifting the bank secrecy restrictions in fraud cases.
The proposed general tax amnesty program is part of Package 1B of the Duterte administration’s comprehensive tax reform program.
In February, President Duterte signed into law Republic Act 11213 or the Tax Amnesty Act, but he vetoed the law’s sections on the general tax amnesty program due to the lack of provisions on bank secrecy and automatic exchange of information.
This left only the estate tax amnesty and tax amnesty on delinquencies under the law.
Duterte said he vetoed the items as implementing a general tax amnesty law without lifting the bank secrecy would only lead to revenue losses for the government and encourage tax evasion.