DOF bent on getting bank secrecy lifted under 18th Congress

Finance Secretary Carlos G. Dominguez III INQUIRER File Photo

The head of the Duterte administration’s economic team wants the lifting of bank secrecy for tax purposes and predicate crimes passed within the 18th Congress to make it easier for the Bureau of Internal Revenue (BIR) to run after more tax cheats.

“It is absolutely necessary for proper tax administration, and we are determined to see this passed” by the current Congress, Finance Secretary Carlos G. Dominguez III told reporters last week.

Dominguez said that while the BIR might have evidence against tax evaders and should countercheck with their bank accounts, the country’s secrecy law hinders further investigation.

“We’re not asking the BIR to look at bank accounts for curiosity or gossip. If we have a good suspicion that a crime is being committed—tax evasion, money laundering—that’s when we’ll look at it. How can you expect better tax collection if you can’t?”
Besides tax evasion, lifting of bank secrecy can also allow other authorities to investigate heinous crimes, he added.
Finance Undersecretary Antonette C. Tionko said easing the bank secrecy law would allow the Philippines to comply with its international obligations entailing automatic exchange of information.

“Every other country in the world has it—we’re not asking for something that is not standard,” according to Dominguez.

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

Dominguez said the Department of Finance (DOF) was “not looking to pressure Congress” to pass the measure—“we’re just asking Congress: give us the tools so that our tax and other authorities can do their job and pursue them properly.”

Last week, the DOF said the Bangko Sentral ng Pilipinas (BSP) had joined the push to lift bank secrecy in the country.

Quoting a recent message of BSP Gov. Benjamin E. Diokno to Dominguez, the DOF had said the BSP “wants to get involved in efforts to convince Congress that lifting the bank secrecy law is a crucial and indispensable part in the grant of amnesty to erring taxpayers.”

“If the lifting of bank secrecy will be passed, it will help [the Anti-Money Laundering Council] because it would allow us to check all accounts. Right now, AMLC only requires reporting if transactions reach a certain threshold,” Diokno, who chairs AMLC, told the Inquirer last May.

Opening up all bank accounts to AMLC scrutiny will serve as a “transition” to possibly uncovering financial crimes, according to Diokno.