Malacañang grateful over RP's removal from list of tax cheats

MANILA, Philippines - A Palace official yesterday hailed the decision of the Paris-based Organization for Economic Cooperation and Development (OECD) to remove the Philippines from its list of countries worldwide that flunked international tax standards.

“We’re very happy with that latest development. It’s a significant step in the right direction in our fight against money laundering,” deputy presidential spokesperson Abigail Valte told Palace reporters in a briefing.

When asked whether credit should also be given to the administration of former president and now Pampanga Rep. Gloria Macapagal-Arroyo, she clarified that lawmaker-proponents who worked hard last February should also be lauded.

“Legislators should also be given credit for that. Legislation was done last February while results came out this month,” Valte explained. But appointees of President Aquino “really pushed for it when the administration took over.”

In a statement Tuesday, OECD took the Philippines off its list of tax havens, and left behind 11 “grey list” jurisdictions that have not implemented internationally accepted tax standards.

“The Philippines moved up to the list of jurisdictions that have substantially implemented the internationally agreed tax standard,” it declared.

According to OECD, the exclusion came out after the government “overturned domestic legal restrictions that prevented its tax authorities from obtaining and exchanging certain types of information, such as bank information.”

The country had been in the “grey list” of territories around the world that had committed to internationally accepted tax standards but had not yet fully implemented them.

Among the 11 countries that remained on the list were Uruguay, Panama, Liberia and a handful of island states in the Pacific. There are no jurisdictions left on the OECD’s list of places that have not committed to internationally agreed tax standards.

A forum set up to fight tax fraud and bank secrecy met in Singapore this week to assess progress ahead of the Group of 20 (G20) summit.

More than 200 delegates to the Global Forum on Transparency and Exchange of Information for Tax Purposes will take part in two days of talks in Singapore, an Asian banking center that has vowed to tackle cross-border tax cheats.

The OECD announcement came after Finance Secretary Cesar Purisima signed Revenue Regulation (RR) 10-2010 that will be used to implement Republic Act 10021, or The Exchange of Information on Tax Matters Act.

RR 10-2010, which became a law in March this year, will still have to be published in a newspaper of general circulation before taking effect 15 days later.

The OECD statement noted that the Philippines has a network of more than 30 treaties that provide for exchange of information on tax matters.

“Until now, however, domestic legal restrictions prevented its tax authorities from obtaining and exchanging certain types of information... The new law and regulations remove these restrictions, thus enabling many of the Philippines’ existing treaties to meet the international standard.”

As well as supplying information to foreign countries about bank accounts in the Philippines, the government said it can now request information on overseas accounts held by its citizens.

“Tax evaders now have nowhere to hide,” Finance Undersecretary Carlo Carag said in a statement, adding the changes would complement existing government campaigns to crack down on tax evasion and smuggling.