2019News

Proposal to ease bank secrecy still a hurdle for general tax amnesty

By Camille A. Aguinaldo, February 19 2019; Business World

https://www.bworldonline.com/proposal-to-ease-bank-secrecy-still-a-hurdle-for-general-tax-amnesty/

Image Credit to Business World

SENATOR Panfilo M. Lacson on Monday said he will support the passage of a general tax amnesty bill in the 18th Congress, but noted that lawmakers may still be “wary” of easing bank secrecy laws, as requested by President Rodrigo R. Duterte in his veto message last Friday on this measure.

“Much depends on the composition of the 18th Congress. If the majority of senators and congressmen would be wary of relaxing the Bank Secrecy Act in relation to bank transactions, we can kiss that bill goodbye,” he said in a mobile phone message.

“If I can speak for myself, I am willing to support the measure as I have done before.”

The President has partially vetoed the tax amnesty bill and retained only provisions granting reprieve for estate tax liabilities and national tax delinquencies in specific circumstances. The program seeks to provide a one-time relief for those with unpaid taxes for years up to 2017.

In his veto message released to reporters on Monday, Mr. Duterte said he disagreed with the general amnesty mechanism in the enrolled bill due to the lack of provisions lifting bank secrecy on fraud cases, the lack of legal framework on the automatic exchange of information with foreign tax authorities, and the safeguards to ensure truthfulness of asset or net worth declaration.

“I believe that, ultimately the original objective will not be met under the proposed framework. Without the provisions breaking down the walls of bank secrecy, setting the legal framework for us to comply with international standards on exchange of information for tax purposes, and safeguarding against those who abuse the amnesty by declaring an untruthful asset or net worth, a general tax amnesty that is overgenerous and unregulated would create an environment ripe for future tax evasion, the very thing we wish to address,” Mr. Duterte had said.

“Without these measures, the government and ultimately the Filipino people, will incur long term substantial revenue losses. Our experience with the 2006 tax amnesty under Republic Act No. 9480 has shown that without safeguards and measures against tax evasion, the objectives of an amnesty such as raising revenues and expanding the taxes cannot be fully achieved.”

The President called on Congress to pass another general tax amnesty bill that would include these safeguards.

Senate President Vicente C. Sotto III, however, cited the need for changes at the Presidential Legislative Liaison Office (PLLO), the government office tasked to coordinate legislative action on the Executive branch’s priorities.

“This is again another testament that we need to revitalize or even upgrade the PLLO. This is the nth time that we do not know what the Executive department wants from us,” he told reporters via text. “Like all the other bills vetoed, we could have addressed the provisions that the executive does not want to execute. The legislative department does not consult a crystal ball to know.” — Camille A. Aguinaldo

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