The incoming Congress expects the Executive to pitch anew an initiative, led by the Bureau of Internal Revenue (BIR), to lift bank secrecy on serious tax-evasion cases, but some senators said the agency’s proposal is “overbroad” and should be revisited.
The bone of contention, in the view of outgoing members of the Senate Ways and Means Committee, is that the BIR wants to grant access to bank accounts of suspected tax evaders to far too many officials than necessary.
“The BIR and the Department of Finance [DOF] are the ones pushing [it] but their proposed bill was overbroad, allowing many hundred officials access,” Sen. Juan Edgardo Angara told the BusinessMirror over the weekend.
Angara added they sent the proposal back to the proponents for further refinements.
“We asked them to tailor it well to make it acceptable,” he said.
It will be recalled that the BIR and the DOF had long clamored for the easing of bank-secrecy rules, saying the Philippines was supposedly one of the few countries where tax agencies have difficulty chasing suspected big-time tax evaders because of strict bank-secrecy laws.
In the campaign for the May 9 national elections, bank secrecy became an issue once more amid allegations by Sen. Antonio Trillanes IV that then survey front-runner Rodrigo R. Duterte kept hundreds of millions in bank accounts that were not properly disclosed.
Trillanes was put on the spot when Duterte lawyers demanded that the senator substantiate how he obtained supposed bank documents bolstering his “tale.”
Duterte’s lawyer, Salvador Panelo, said Trillanes’s claim constituted “double hearsay” because it came from a certain Joseph de Mesa, whom Trillanes did not know, and who, in turn, claimed he got it from another person.
Banking and finance officials have proposed to leaders of both houses of Congress to amend the country’s Anti-Money Laundering Act and revise the bank deposit-secrecy law for tax-evasion purposes.
Among the more salient proposed amendments to Republic Act (RA) 9160, also known as the Amla of 2001, is to include casinos, among others, as mentioned in the Financial Action Task Force recommendations, as covered entities under the law; as well as the inclusion of tax evasion, among other crimes, as a predicate crime to money laundering. The government also said the proposal aims to improve the ability of the Anti-Money Laundering Council to safeguard the financial system from money-laundering activities.
The DOF also wanted to amend RA 1405, or the bank-secrecy law, and RA 6426, otherwise known as the Foreign Currency Deposit Act of the Philippines, to lift restrictions on bank secrecy of peso deposits and foreign-currency deposits for tax purposes.
“We are one of only three countries in the entire world where our tax administration cannot access bank transactions for tax-evasion purposes. We are one of only two countries in the entire world where tax evasion is not a predicate crime to money laundering,” Finance Secretary Cesar V. Purisima said in a statement.