Purisima seeks uniform tax rate for financial instruments in SEAsia

MANILA, Philippines - Finance Secretary Cesar Purisima is seeking a uniform tax rate on financial instruments in Southeast Asia in preparation for the establishment of the Asean Economic Community by end-2015.

Purisima, who will be attending the 19th Asean Finance Ministers’ Meeting in Kuala Lumpur today (Mar. 21), will make a pitch for a harmonized tax rate on any tradable asset that can be classified generally as equity-based or debt-based.

Purisima also seeks to expedite negotiations on bilateral tax treaties to broaden the scope of integration.

Member countries of the Association of Southeast Asian Nations (ASEAN) are moving towards an integrated economic region that will promote free movement of goods, services,investment and skilled labor as well as capital flows.

For an economic community to fully reap the benefits of integration, it requires the harmonization of economic and business-related laws which include taxation.

Purisima is also expected to float the idea of  an Asean Tax Identification Number (TIN), similar to the APEC TIN that is being introduced by the Philippines in the the APEC Finance Ministers’ Process (FMP) under its Cebu Action Plan.

 “I highly look forward to offering insights on our proposed Cebu Action Plan in Apec as a way to enhance our progress in Asean. For example, part of our vision for an integrated region is to see interlinked economies with ease of access to credit and finance, especially for small-income households and SMEs. This ensures that an integrated ASEAN is one that is inclusive,” Purisima said.

The Asean TIN will make it easier to move capital across financial markets in the region and allow for better cooperation between jurisdictions in tax-related issues.

With the Asean TIN, Purisima said it would be easier to share data with respect to the tax history and information of entities doing business in the region.

Greater coordination on tax-related issues will curb tax evasion, smuggling, corruption and money laundering.

Apart from this, Purisima is also calling for  concerted efforts among Asean members towards disaster risk reductuion.

He said member-economies must build risk insurance facilities and mechanisms to reduce their economic vulnerability to natural disasters.

“A reliably robust buffer makes for a stronger, more prosperous region,” Purisima said.

Purisima said the Philippines is committed to achieving the integration targets of the AEC, noting it has one of the highest compliance rates in the AEC scorecard at about 88 percent.