Easing of bank secrecy for tax purposes pushed

The government stands to lose P15 billion in additional revenues if Congress would not include the automatic exchange of information as well as the lifting of bank secrecy for taxation purposes in the proposed tax reform package 1B.

Finance Secretary Carlos Dominguez III told reporters that the Department of Finance (DOF) would push to reinstate these two measures after both the lower House and the Senate reportedly removed them from the pending bills containing package 1B in the two chambers.

“We trust that the legislature will recognize the necessity of strengthening the law to enhance the administration’s ability to enforce tax laws, which were passed by them in the first place,” Dominguez said in a text message to reporters.

Package 1B covers tax amnesty and other tax administration measures, including higher motor vehicle user’s charge, that were removed by the Senate from  the first tax reform package passed  last year.

Dominguez earlier said that the government was looking to implement the much-awaited tax amnesty by April next year to coincide with the deadline of filing income tax returns.

Once package 1B is passed, it would add about P40 billion in revenues, based on earlier DOF estimates.

In July, Dominguez said the proposed tax amnesty program “will help clear the dockets as well as enable the transfer of stranded real properties so that they can be made economically useful.”

Under the DOF’s proposal, the government will offer estate tax amnesty wherein it will collect only 6 percent of the net undeclared estate tax for those who died prior to Jan. 1 this year. Estate tax used to be a higher 20 percent.

Also, the DOF is proposing “a general tax amnesty on all unpaid internal revenue taxes, excluding internal revenue taxes arising from importation and customs duties,” Dominguez had said.

The finance had also said that the government wanted to offer amnesty on tax delinquencies at a rate of 50 percent on the basic tax, excluding interest charges and surcharges.

“For those already facing criminal cases in court, we are proposing a rate of 80 percent of the basic tax only,” he had said.