Palace prods Congress on easing bank secrecy

MANILA, Philippines — Malacañang is optimistic that lawmakers will heed President Duterte’s call for them to pass a tax amnesty measure that will lift bank secrecy for fraud.

Duterte signed the tax amnesty law on Feb. 14 but vetoed some items, including a provision that would have granted general amnesty for all unpaid internal revenue taxes.

In his veto message, Duterte said a general amnesty that is “over-generous and unregulated” would “create an environment ripe for future tax evasion,” the very thing that the law seeks to address.

“Given these, I ask Congress to pass another general tax amnesty bill that includes the lifting of bank secrecy for fraud cases, the inclusion of an automatic exchange of information and safeguards to ensure that asset or net worth declarations are truthful,” the President said in his veto message.

“With these provisions, the general tax amnesty will meet both its tax administration and revenue purposes,” he added.

Presidential spokesman Salvador Panelo expressed confidence that lawmakers would be responsive to the needs of the times.

“We are confident that members of Congress will fulfill their duty to the Filipino people as mandated by the Constitution, which is they should be honest in all dealings and they should pursue a policy of accountability and transparency in the realm of governance,” Panelo said at a press briefing.

The presidential spokesman said lifting bank secrecy would allow authorities to examine the records of those who are believed to have committed fraud.

“If you lift it, you can no longer lie because your bank deposits can be accessed,” he said. 

One of the vetoed provisions of the law stated that any person may enjoy the immunities and privileges of general tax amnesty by paying an amnesty tax at the rate of two percent based on the taxpayer’s total assets as of Dec. 31, 2017 as declared in the statement of total assets. The taxpayer was also given the option to pay an amnesty tax at two percent based on his total net worth as of Dec. 31, 2017 as declared in the statement of assets, liabilities and net worth.

Another vetoed section stated that the statement of total assets and the statement of assets, liabilities and net worth filed at the option of the taxpayer “shall be conclusively presumed as true, correct and final upon filing thereof and shall be deemed complete upon full payment of the amount due.”

“The general amnesty program is meant to give taxpayers a fresh start as well as to signal the start of a fair tax enforcement campaign by the tax authorities. It is not meant to be abused for the gain of the few and the loss of the rest of the citizenry,” Duterte said in his veto message.

The President said safeguards against tax evasion are expected to contribute P76.6 billion to public funds in the next five years.

He also rejected a provision on one-time declaration and settlement of estate taxes on properties subject of multiple unsettled estates.

Duterte said there is a need to apply the estate tax amnesty at every stage of the transfer of property.

“To implement the one-time settlement across multiple estates would erode the expected revenue of the government from the estate tax amnesty,” he said.

Duterte also vetoed the provision presuming the correctness of the estate tax amnesty returns.

The President said the valuation of properties is a technical aspect that could not be left to mere self-declaration.

“The grant of amnesty is a privilege that the administration supports without question. However, as with any other privilege, it is open to abuse. I am of the view that we must balance this privilege with accountability,” Duterte said.