DOF wants bank secrecy laws eased

The Department of Finance (DOF) is pushing for eased restrictions in bank secrecy laws in order to curb tax evasion.

At the same time, the Philippines will be part of increasing efforts of developed countries belonging to the Organization for Economic Cooperation and Development (OECD) aimed at plugging tax leaks across borders.

According to Finance Secretary Cesar V. Purisima, the DOF was advocating that the country adopt a measure that would allow the automatic exchange of data needed by tax authorities across borders, similar to a recently passed legislation in the European Union.

“Revising restrictions in bank secrecy laws for more effective tax administration is now becoming an international standard,” Purisima said in a speech delivered by Finance Undersecretary Carlo A. Carag to participants of the DOF’s International Tax Forum last Friday.

Purisima noted that as far as the Philippines was concerned, “we are reputed to be one of only three countries that do not require bank transparency for tax administrative purposes.”

Given the challenges presented by a global economy, which has made tax issues “internationalized,” Purisima said that existing laws should be updated to address emerging issues.

Meanwhile, the OECD announced on its website last Nov. 12 that as part of new strategies under its Base Erosion and Profit Shifting (BEPS) project, the Philippines would be one of 10 developing countries, including Albania, Jamaica, Kenya, Peru, Senegal and Tunisia, which “will be invited to participate in meetings of the key BEPS decision-making body—the Committee on Fiscal Affairs (CFA)—and its technical working groups” starting January next year.

“The BEPS project aims to create a coherent set of international tax rules to end the erosion of national tax bases and the artificial shifting of profits to jurisdictions solely to avoid paying tax,” OECD explained.

In a separate statement, the DOF said that “[j]oining the CFA places the Philippines at the forefront of the joint effort from both developed and developing economies in addressing troubling trends in unfair and unjust tax avoidance and evasion.”