Lawmakers on Monday expressed concern over the Bureau of Internal Revenue (BIR) proposal amending the bank secrecy law in exchange for the Executive Department’s support on tax-reform proposal in Congress.
Deputy Majority Leader and National Unity Party Rep. Magtanggol T. Gunigundo of the Second District of Valenzuela said that this proposal of the BIR is very dangerous.
“That’s dangerous. It violates the right to privacy of taxpayers. It also does not encourage those in the informal economy to enter the formal economy,” he said.
Gunigundo, one of the authors of the bill lowering income and corporate-tax rates, said that the current administration should leave the tax proposal to the next government.
“Although I am for lower income taxes, it would be best to leave this policy shift to the next administration. The GAA [General Appropriations Act] of 2016 is working under the premise of the existing tax structure. Any policy shift will be rolled out by 2017 at the earliest,” he said.
In a news report, Sen. Sonny Angara, chairman of the Senate Ways and Means committee, admitted on Monday that Internal Revenue Commissioner Kim Jacinto-Henares said that the Executive will be supportive to the tax-reform proposal if it passes the proposal amending the bank secrecy law.
Angara, in the same report, added that the Department of Finance (DOF) and BIR are taking a position that, in order to preserve the revenue balance, the tax-reform initiative will need to be offset by measures that will take up the slack causes by reduced collection due to lower taxes.
“This apparently includes loosening up bank secrecy laws in order to empower the BIR to run after tax cheats and bring about improved collection,” the senator added.
Earlier, Malacañang, taking the cue from the DOF and the BIR, has rejected the passage in Congress of a long-pending bill mandating adjustments in individual and corporate income-tax rates, saying that the government “cannot put our fiscal sustainability and credit rating at risk by doing piecemeal revenue-reducing legislation.”
But for Henares, the BIR wanted Congress to ease the restriction on bank accounts for “tax purposes” before President Aquino’s term ends in June 2016, saying the Philippines is one of the three countries in the world that still have restrictive banking laws.
Nationalist People’s Coalition Rep. Sherwin Gatchalian of the First District of Valenzuela, for his part, said that the BIR proposal is unfair for the middle class.
“That’s not fair for the middle class. These are two very distinct policies and it cannot be intertwined,” he said in a text message.
Earlier, Speaker Feliciano Belmonte Jr. rejected the Executive proposal to lift the bank secrecy law to collect more taxes, saying it will only scare businessmen in the country.
“I am against it because this will scare off local and foreign investors,” Belmonte said, adding, “My challenge to the BIR is to expand the minuscule tax base of the country, and start with the country’s richest families and those, although ostensibly not rich, deport themselves with super expensive cars.”
Meanwhile, Liberal Party Rep. Roman Romulo of Pasig backed the BIR proposal amending bank secrecy law.
“In principle, I have no problem with the suggestion that we amend the bank secrecy law for tax purposes. However, it would be appreciated if they provide us with details so that we can study it. We have been requesting for a draft for our study but no draft has been submitted,” Romulo said.