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All presidential bets favor tax reforms, lifting of bank secrecy

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All presidential bets favor tax reforms, lifting of bank secrecy

By: - Reporter / @bendeveraINQ
/ 05:46 AM May 07, 2016

ALL FIVE presidential aspirants—Jejomar Binay, Miriam Defensor-Santiago, Rodrigo Duterte, Grace Poe and Mar Roxas will support moves to lift the bank secrecy law in order to examine the accounts of suspected tax evaders.

In the national election tax survey conducted by the Tax Management Association of the Philippines (TMAP), the five candidates ticked the “Yes” box next to the question: “Would you support the lifting of bank secrecy laws consistent with international standard to enable revenue authorities to combat tax evasion?”

“We will liberalize bank secrecy laws as a means to generate additional government revenues as well as make tax evasion a predicate crime in the Anti-Money Laundering Act to enable us to catch big tax cheats,” Poe said.

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Anticorruption agenda

For his part, Roxas pointed out that he had earlier signed a waiver of bank secrecy law for the duration of his candidacy.

“In fact, as part of my anticorruption agenda, if elected president, my Cabinet and I will sign a waiver of bank secrecy law to promote transparency, especially in public service,” the Liberal Party standard-bearer added.

“For tax investigation purposes, I will support lifting of bank secrecy law to strengthen our ability to collect revenues. We are one of only three countries in the entire world, the other two being Lebanon and Switzerland, where tax administration cannot access bank transactions due to our restrictive Bank Secrecy Law. If we look at the numbers, Bureau of Internal Revenue (BIR) collections have not kept up with the growth in deposits. For example, in 2013, bank deposits grew by 33 percent but BIR revenues grew by only 15 percent. Moreover, lifting of bank secrecy for tax investigation purposes can greatly improve our chances of strengthening our 380 Run After Tax Evaders (Rate) cases, with around P68.52 billion total estimated tax liabilities that can be recovered,” Roxas explained.

Binay, Defensor-Santiago and Duterte did not elaborate on their responses to the said question.

Bank accounts allegedly belonging to the front-runner Duterte were leaked last week by vice presidential candidate Antonio Trillanes, while Binay had also been accused of keeping billion-peso bank accounts.

Income tax adjustment

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All of the five presidential candidates said they “would institute moves for a genuine, comprehensive tax reform” when catapulted to the highest post in the land. They also agreed that tax reform “should be a priority of government.”

Binay, Santiago, Duterte, Poe and Roxas also said they would support an immediate adjustment of the personal income tax brackets to take inflation into account.

In the cases of Binay and Poe, they committed to implement the income tax rate adjustment within their first 100 days in office while Duterte said he would do so in his first 180 days as president.

 

Tax Reform Commission

“A Tax Reform Commission will be created in my first 100 days in office, Poe said, while according to Binay, “we will convene the LEDAC (Legislative Executive Development Advisory Council) within the first 100 days and discuss the proposal for a comprehensive tax reform which includes adjusting the tax brackets.”

As for Santiago, she said “I promise to reform the tax system within my first six months in office.”

Roxas did not commit to implementing the tax bracket adjustments within his first 100 days in office.

“In general, I am not in favor of automatic indexing—whether it be on wages, taxes, pensions, etc. We have to keep in mind that while the intention might be good, there will be unintended consequences. Hence, every decision with regard to tax brackets must be pursuant to deliberate and thoughtful consideration. I am for responsible governance. If Leni [Robredo] and I win, in the first 100 days, I will launch a review for the adjustment of personal income tax brackets, which is part of the comprehensive tax reform package that I will push for,” Roxas said.

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TAGS: bank secrecy, elections 2016, Grace Poe, Jejomar Binay, Mar Roxas, Miriam defensor-santiago, Rodrigo Duterte, tax reforms
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