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DOF wants bank secrecy lifted by Congress

Updated

By Chino S. Leyco

The Department of Finance (DOF) is determined to pass the measure seeking to ease the country’s restrictive deposit secrecy laws within the current Congress to arm the Bureau of Internal Revenue (BIR) against tax evaders.

Finance Secretary Carlos G. Dominguez III (DOF photo / Howard Felipe)

Finance Secretary Carlos G. Dominguez III (DOF photo / Howard Felipe)

Finance Secretary Carlos G. Dominguez III said the BIR will not use its powers over bank records for gossip and curiosity but to unearth individuals engaged in tax evasion, money laundering and heinous crimes.

“It is absolutely necessary for proper tax administration and we are determined to see this passed,” Dominguez told reporters when asked about the DOF-backed bill on bank secrecy, noting the Duterte administration wants it in the 18th Congress.

Globally, the Philippines and Lebanon are the only countries that still implement stringent bank secrecy laws.

Dominguez said the present bank secrecy laws prohibit the BIR to look into the bank records of people who are suspected or have committed tax evasion and other crimes.

“We’re not asking him to look at it for curiosity or for gossip or for something. If we have a good suspicion that a crime is being committed – tax evasion, money laundering – that’s when we’ll look at it,” the finance chief said.

Until the bank secrecy laws are relaxed, Dominguez said the BIR cannot be expected to improve its tax collection efficiency.

Last week, Dominguez said that Bangko Sentral ng Pilipinas (BSP) Governor Benjamin E. Diokno 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.

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

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.

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 were 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.

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