BSP joins Finance dept in calling for lifting of bank secrecy under tax amnesty proposal

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FILE PHOTO. The Bangko Sentral ng Pilipinas joins the Department of Finance in urging lawmakers to include lifting of bank secrecy in a measure giving amnesty to erring taxpayers.

Metro Manila (CNN Philippines, October 9) — The Bangko Sentral ng Pilipinas (BSP) has joined the Department of Finance (DOF) in calling on lawmakers to include lifting of bank secrecy in a measure giving amnesty to delinquent taxpayers.

In a statement Wednesday, the DOF said BSP Governor Benjamin Diokno has expressed the central bank’s intention to participate in convincing lawmakers that easing bank secrecy laws is paramount in pardoning erring taxpayers.

President Rodrigo Duterte in February enacted Republic Act 11213 or the Tax Amnesty Act.

He, however, vetoed some items of the measure, including the grant of amnesty to people who failed to pay the correct taxes in 2017 and earlier due to lack of a provision on the lifting of bank secrecy.

Duterte said giving general tax amnesty without lifting bank secrecy laws would only lead to revenue losses for the government and encourage tax evasion.

The DOF said Finance Secretary Sonny Dominguez has directed Finance Undersecretary Gil Beltran to make sure that the Congress is aware of the joint position on the issue.

Had Duterte not vetoed the general tax amnesty provision, the law would raise only P6.8 billion in additional revenues in 2019, Domiguez said. This is lower than the estimated P13.6 billion if lifting bank secrecy and allowing the automatic exchange of information were already in place.

Meanwhile, indirect revenue losses resulting from enforcement activities would be around P53 billion if the general tax amnesty had pushed through without the safeguards, the secretary added.

On the other hand, Dominguez pointed out that lifting bank secrecy and allowing the automatic exchange of information would have generated up to P76.6 billion in direct and indirect revenues in the next five years.

The Philippines and Lebanon are the only countries in the world that still implement stringent bank secrecy laws.