Diokno proposes new tax amnesty
The Department of Budget and Management (DBM) raised the possibility of granting a general tax amnesty to lure individuals and corporations with outstanding liabilities to settle their obligations without fear of being slapped with criminal charges.
Following the tax settlement of cigarette-firm Mighty Corp. with the government, Budget Secretary Benjamin E. Diokno said the Durterte administration has the “credibility” in demonstrating its determination to enforce the law.
“I think this is the best time to have an amnesty, now that we have established our credibility to run after those who have evaded [to pay taxes],” Diokno said at the Philippine Economic Society annual meeting and conference yesterday.
Currently, there is a proposal pending in Congress seeking a general tax amnesty aimed at expanding the tax base by luring untaxed individuals or tax evaders.
Under the Senate Bill 920 of Senator Ralph G. Recto, the lawmaker’s tax amnesty measure will cover all national internal revenue taxes for the taxable year 2015 and prior years with or without tax assessments.
The amnesty, however, will not cover those with pending cases involving “unexplained or unlawfully acquired wealth,” or under the Anti-Graft and Corrupt Practices Act and persons charged with violating the Anti-Money Laundering Law, among others.
Asked if Diokno is supporting the Rector bill, the budget chief said “we’re not referring to any bill.”
Diokno said that his tax amnesty proposal may run for a year and will provide higher discounts to individuals or entities availing the program within a three to six-month period.
He, however, clarified that economic managers have yet to formally discuss his tax amnesty plan.
In April, Finance Secretary Carlos G. Dominguez III said that he wanted the lifting of the country’s bank secrecy policies before introducing any tax amnesty.
“There are things that have to be done to make any tax amnesty, if there is one, effective,” Dominguez said, noting that the repeal of the long-standing bank secrecy policies is necessary to boost taxpayers’ compliance.
Dominguez clarified that a tax amnesty program was “really premature at this point in time,” but they “will certainly consider something in that area” in the future.
“Number one, they must realize that the government can actually collect the tax, and two that other measures such as the lifting of the bank secrecy law are in place so that it is really serious,” he added.
Dominguez had said the easing of the bank secrecy law could unlock billions of pesos kept away from the government authorities, pointing the country’s bank secrecy law is among the world’s most restrictive regulations.
The Philippines together with Lebanon and Switzerland are the only countries in the world that have a bank secrecy law and the Philippines together with Lebanon are the two remaining countries in the world where tax evasion is not a predicate crime in anti-money laundering activities.
Based on an earlier estimated by the finance department, the easing of restrictions in the bank secrecy law could boost the national coffers by at least P300 billion.