Palace may be giving up on amending Bank Secrecy Law

MANILA, Philippines - The Aquino administration has apparently thrown in the towel with regard to easing restrictions in the Bank Secrecy Law, following the refusal of Congress to approve it in exchange for lowering the income taxes of workers and corporations.

Bureau of Internal Revenue (BIR) Commissioner Kim Henares and Finance Secretary Cesar Purisima have been pushing for the lifting of the restrictions in the Bank Secrecy Law so government can offset the P29-billion projected losses if the measure reducing the income taxes of workers and corporations is enacted.

“This is a way to collect taxes properly so that we will have room to adjust, but they (leaders of the House of Representatives) don’t like it, so there is nothing we can do,” Henares told The STAR yesterday.

“They (lawmakers) want to lower the rate of income tax. We are suggesting a way how to do it without increasing taxes. At the end of the day, it is up to them,” she added.

House leaders rejected last week Malacañang’s proposal to scrap bank secrecy laws, saying it would discourage investors and could be used to persecute political opponents.

“I am against it because this will scare off local and foreign investors,” Speaker Feliciano Belmonte Jr. said.

“It’s a gambit against the idea of lowering income tax. My challenge to BIR is to expand the miniscule tax base of the country and start with the country’s richest families and those, although ostensibly not rich, who deport themselves with super expensive cars,” he added.

Apparently, only Purisima and Henares are opposed to the reduction of income taxes for fixed-income earners.

As it turned out, Trade Secretary Gregory Domingo and National Economic and Development Authority director-general Arsenio Balisacan are very open to the income tax reduction.

However, highly reliable sources revealed to The STAR that Domingo received a dressing down from President Aquino supposedly after Domingo was quoted in a business newspaper as saying that it is about time to lower income taxes.