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Easing of bank secrecy law for fraud cases pushed

/ 05:28 AM February 21, 2019

The head of the country’s biggest revenue agency is supporting moves to lift bank secrecy to better run after tax cheats.

“Lifting bank secrecy law for tax purposes will help prosper the enforcement of tax laws. It will become a deterrent for taxpayers not to pay right taxes, which will hopefully lessen tax evasion in the long run,” Commissioner Caesar Dulay of the Bureau of Internal Revenue (BIR) said in a text message to the Inquirer.

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To recall, President Duterte himself vetoed the general tax amnesty provision under Republic Act No. 11213, or the Tax Amnesty Act of 2019, issued on Feb. 14, pending the lifting of bank secrecy for tax purposes.

“The President was constrained to veto the portion of the law covering the general amnesty because of the lack of provisions breaking the walls of bank secrecy, setting the framework for complying with international standards on exchange of information and other safeguards against those who abuse by declaring untruthful assets or net worth,” Finance Secretary Carlos Dominguez III explained earlier.

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At present, only the Philippines and Lebanon still restrict access to bank accounts.

The latest BIR data showed that only less than 1 percent of the more than 1,000 alleged tax evaders who had been slapped cases were convicted in the past 13 years.

Between 2005 and 2018, only 10 cases filed under the Run After Tax Evaders (RATE) program were resolved by courts in favor of the government. Four respondents were acquitted, although with civil liability.

A bigger number of RATE cases—53—had been dismissed by courts.

As of the end of 2018, 929 cases were pending at the Department of Justice. Still pending before various courts were another 68 tax evasion cases.

The 1,064 tax evasion cases filed from 2005 to 2018 were estimated to involve P148.35 billion in tax liabilities.

In the first two and a half years of the Duterte administration, the BIR under Dulay already filed 340 RATE cases as of January 2019, or about a third of the total.

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Former Sen. Serge Osmeña III had commented that the lifting of restrictions on bank secrecy has not moved forward in Congress because “the lower House does not seem to want it because it hides their assets.”

“It is very important to lift restrictions on bank secrecy law but unfortunately we haven’t been able to do that in about 60 years,” he said in a television interview.

He noted that it was vital to loosen the bank secrecy law as it was the only way to “catch people who are doing wrong.” —BEN O. DE VERA

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TAGS: bank secrecy law, Bureau of Internal Revenue (BIR), Commissioner Caesar Dulay, fraud cases, tax evasion, tax laws
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