Osmeña backs Henares call to lift bank secrecy laws-A A +A
Tuesday, March 25, 2014
BUREAU of Internal Revenue Commissioner Kim Henares found an ally in the Senate after Senator Sergio Osmeña III said the BIR chief has a point in asking for the lifting of the bank secrecy law.
In an interview, Osmeña said the proposal of Henares can really help the government improve tax collection.
"I don't think there is really that chilling effect. The United States IRS (Internal Revenue Service of the United States of America) if they think you cheating the government will just ask the Judge to issue an order that will allow them to inspect your bank account. And if your income and your properties and monies does not jibe at all, well, as a taxpayer, you have to prove that they are wrong which is the opposite here in the Philippines," the senator said.
Osmeña added that in the United States tax cases are handled differently in that one is presumed guilty by the tax authorities and it is up to the taxpayer to prove himself innocent.
"Here in our country, the tax evader can even challenge the government to prove it first and it is really difficult. The government cannot really catch those tax evaders and corrupt officials if we don't lift the bank secrecy," said Osmeña.
"Kung wala ka naman tinatago, wala kang dapat katakutan sa BIR. I mean, if your conscience is clean and clear there is nothing to be afraid of. I am open to that suggestion," he added.
But some senators are wary about the proposal of the BIR.
Senator Nancy Binay said that while Henares's suggestion is understandable, she believes such proposal can erode the private sector's trust in the government.
"Although, I understand where Commissioner Kim is coming from as far as taxation is concerned, her proposal has a chilling effect on the banking industry since there are more disadvantages than advantages," Binay said.
The senator said the government has yet to plug the loopholes in the peace and order situation in the country and lifting the Bank Secrecy Law may be used for political purposes.
"Can the BIR guarantee that the information will be for purposes and will not be used to commit crime or for political harassment? There are exceptions under the Bank Secrecy Law," she said.
Earlier Commissioner Henares said the move is in line with the country's establishing a single and global standard in tracking tax fraud.
Senator Francis Escudero, for his part, said existing laws, including the bank secrecy law and the Anti-Money Laundering Act, already authorize the BIR to conduct financial probes on certain individuals for tax purposes.
"Any move to force private individuals to open their bank accounts for government scrutiny might be too much," he said.
"The current exceptions to the bank secrecy law such as corruption investigation and AMLC (Anti Money Laundering Council)’s powers on private individuals, I believe, is sufficient," he added.
Escudero, chairman of the Senate committee on finance, said he has filed a bill requiring all public officials to sign a waiver of the secrecy of their bank deposits with the filing of their statements of assets, liabilities and net worth.
Senator Grace Poe, on the other hand, said the matter should be thoroughly studied and the banking industry should be consulted.
"The public might lose faith in the banks if their accounts are made open to scrutiny by the BIR. If this happens the economy may suffer," Poe said.
"Anyway the BIR meantime has the ways and means to run after tax cheats pending any amendment," she said.
Senator Vicente Sotto III proposed that the BIR submit a draft measure to Congress "so we can debate on the issue."
"I am not against nor in favor. I suggest the BIR draft a bill in Congress so we can debate on the issue. Besides, that is the only way to do it," Sen. Sotto said.
Senator Juan Edgardo Sonny Angara, chairman of the Senate ways and means committee, said there is a need for lawmakers to balance the "costs and benefits" of such measures.
"The benefits are better tax administration by eliminating fraud misdeclaration, and concealment of income while the costs may include capital flight and loss confidence in the banking system," Angara said. (Camille P. Balagtas/Sunnex)