BSP disputes BIR figures on pawnshops

SHARES:

By:

@paolomontecillo

12:22 AM August 20th, 2013

By: Paolo G. Montecillo, August 20th, 2013 12:22 AM

The Bangko Sentral ng Pilipinas (BSP) has disputed the Department of Finance’s (DOF) records on the numbers of pawnshops, which have become the latest target of authorities in their crackdown on tax delinquents.

BSP Deputy Governor Nestor A. Espenilla Jr. said the central bank’s and the Bureau of Internal Revenue’s (BIR) records might have to be reconciled to avoid the unfair portrayal of the pawning industry as a haven for tax evaders.

“We keep track of active pawnshops in the system. A lot of those (that didn’t pay taxes) are probably closed already,” Espenilla told reporters.

Government records showed that of the 6,301 pawnshops in the country, 5,230 were registered with the BIR and were paying taxes, Finance Secretary Cesar Purisima said earlier.

This meant, he said, that at least 1,071 pawnshops did not file returns and, therefore, did not pay taxes last year. The average tax payment of each pawnshop also fell to P315,812 last year from P363,085 in 2011, he said.

The release of the records on pawnshops is part of the DOF’s shame campaign that focuses on certain industries to illustrate the extent of tax evasion across the country, particularly among businesses and self-employed individuals.

While Espenilla did not deny the existence of possible tax cheats in the pawning industry, he noted efforts in recent years of the BSP to clean up the sector, which historically had been prone to certain criminal activities.

“Pawnshops are legitimate financial intermediaries. They meet a need,” Espenilla said. Unlike banks, pawnshops do not use deposits from the public to lend to clients. Hence, pawnshops are subjected to an entirely different set of rules. “The issue is not safeness and soundness,” he said.

He said the main issue with pawnshops revolved around anti-money laundering allegations. Pawnshops in the past have also been a favorite for thieves looking to unload stolen products, in violation of local “anti-fencing” regulations.

To counter this, the BSP requires banks to follow strict “know-your-pawner” rules. “We have a very active program on inspecting pawnshops,” he said.

Disclaimer: Comments do not represent the views of INQUIRER.net. We reserve the right to exclude comments which are inconsistent with our editorial standards. FULL DISCLAIMER

For feedback, complaints, or inquiries, contact us.