Tax amnesty faces delay
December 5, 2018 at 10:00
Tax amnesty faces delay
Gov’t wants Congress to approve easing of bank secrecy
The much-awaited tax amnesty early next year may be delayed if Congress will not pass it together with the automatic exchange of information and the lifting of bank secrecy for taxation purposes as part of the proposed tax reform package 1B.
“We will see what the final version is going to be. But honestly we really need that partner measure,” Finance Secretary Carlos G. Dominguez III told reporters last week.
The bicameral committee already approved tax amnesty, but reportedly without the two tax administration measures.
“The problem with the bicam is the fact that our original proposal is not completely adopted and it is very necessary for us, we believe, that the law on bank secrecy be relaxed in cases where there is a suspicion. As I’ve mentioned, this is not being requested frivolously. If there’s a law for us to collect a tax and then you don’t give us the tools to do it, then it will be very difficult for us to do it,” Dominguez said.
“If there was no such limitation on the bank accounts, the Mighty case might have been solved earlier,” the finance chief added, referring to the tax evasion charges filed last year against the homegrown cigarette manufacturer, which had used fake cigarette tax stamps to evade payment of the correct taxes.
“And you know that [tax settlement with Mighty] was P30 billion. [But] we do not know how much is out there. For all you know, that P26-billion [tax evasion cases filed against Mighty] is really small in comparison to what is being hidden. So that’s why it’s very necessary to relax bank secrecy for tax purposes,” he said.
Dominguez earlier also warned that the government stood to lose P15 billion in additional revenues if Congress would not include the automatic exchange of information and the bank secrecy relaxation.
Tax reform package 1B covers the tax amnesty and other tax administration measures, including higher motor vehicle user’s charge, which were removed by the Senate from the version of the first tax reform package passed by the Lower House last year.
Dominguez had said that the government was planning to implement the tax amnesty by April next year to coincide with the deadline for the filing of income tax returns.
Once package 1B is passed, it will 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.”
Source: https://business.inquirer.net/261549/tax-amnesty-faces-delay
