Palace: BIR should hold consultations on lifting of bank secrecy law

MANILA, Philippines - Malacañang has joined calls for consultations on proposals to lift the bank secrecy law.

Secretary Herminio Coloma Jr. of the Presidential Communications and Operations Office stressed the importance of having a law that strictly protects the secrecy of bank accounts, and warned that proposals to lift it has widespread implications.

He said there are many stakeholders and they expect the Bureau of Internal Revenue (BIR) and the Department of Finance to hold consultations and studies to determine its implications.

BIR Commissioner Kim Henares said the move would bring the Philippines in line with countries establishing a single and consistent global standard in tracking tax fraud.

She said the Organization of Economic Cooperation and Development (OECD) plans to introduce a new global standard for the automatic exchange of information between tax authorities to make it difficult for people to funnel investments outside of their country of residence.

“Sooner or later, we have to remove that bank secrecy law for tax purposes, because that will be a requirement, globally. The OECD and the United States are requiring transparency in data, including bank data. So whether we like it or not, eventually, we will get to that point. Otherwise, we will be blacklisted as a country and our economic development will be affected by it,” Henares said.

Review law

Sen. Sergio Osmeña III, chairman of the Senate committee on banks, financial institutions and currencies, sees the need to review the bank secrecy law to empower government agents to catch tax evaders.

He said the country’s bank secrecy law is outdated, having been enacted in 1955.

On fears that lifting of the bank secrecy law might cause instability in the banking system, he cited the outcry at the height of the impeachment trial of ousted chief justice Renato Corona in 2012.

“Remember during the Corona trial, there was an outcry to remove the bank secrecy law? I had two whole boxes on bank secrecy, including the hearings we conducted. But I know that nothing will come out of it and indeed nothing happened,” he said.

Osmeña said there is a need to ease the restriction because government agencies, including the BIR, cannot catch tax evaders.

Senator Juan Edgardo Angara also supports the BIR recommendation, but said lawmakers have to study the pros and cons of the proposal.

He said Henares “is correct that the trend is towards an easing of restrictions.”

Senators Francis Escudero, Vicente Sotto III, Grace Poe and Nancy Binay have expressed concern over the proposal, saying it needs further study.  They said there should be safeguards against abuses and assurance that the banking industry will not be adversely affected. – With Paolo Romero, Christina Mendez