OnlineJobs.ph

Monday, March 31, 2014

House won’t lift secrecy of bank deposits

By Jess Diaz 
The Philippine Star 
Feliciano-Belmonte.2MANILA, Philippines – The House of Representatives will not allow the lifting of the secrecy of bank deposits and other transactions, Speaker Feliciano Belmonte Jr. said yesterday.
He said scuttling such protection could result in capital flight, as it would affect depositors’ confidence in the banking system.
“I am against it. Certainly, volume of deposits will be affected. We should not allow the erosion of public confidence in our banking industry,” he said.
Belmonte was commenting on the proposal of Commissioner Kim Henares of the Bureau of Internal Revenue (BIR) to lift the secrecy of bank transactions to make it easier for her agency to flush out tax evaders.
Other House leaders echoed Belmonte’s fears.
Isabela Rep. Giorgidi Aggabao, a deputy speaker, said Congress would be committing a “big mistake” if it agrees to Henares’ proposal.
“I think that will be a big mistake. If the veil of bank secrecy is lifted, I am almost sure capital flight would ensue,” he said.
Marikina Rep. Romero Quimbo said the legislature might violate the citizens’ constitutional right to privacy if it lifts the secrecy of bank deposits.
“One of these rights under the right to privacy is the secrecy of bank deposits. We cannot allow a carte blanche and unqualified access by the BIR to taxpayers’ bank deposits. There must be very specific and carefully crafted grounds for the BIR to start opening bank accounts, otherwise this will be abused,” he said.
“For instance, there must be some degree of determination that a taxpayer is already found prima facie to have been evading taxes before you can open bank accounts. Anything more liberal than this will be deemed unconstitutional,” he said.
Quimbo chairs the committee on ways and means, where any BIR proposal is scrutinized.
Rep. Luzviminda Ilagan of party-list group Gabriela described Henares’ suggestion as “dangerous.”
“It sends a chilling effect to investors. Money laundering abroad will become an option that can impact negatively on our economy. Privacy is violated. The BIR should focus on the big violators,” she said.
Valenzuela Rep. Magtanggol Gunigundo, a deputy majority leader, said he does not see any reason why Republic Act 1405, or the Bank Secrecy Law, should be disturbed at this time.
He said he does not understand why Henares wants to pry bank accounts open directly or indirectly.
- – - – - – - – - – - – - – -
RELATED STORY:

Henares’ move to junk bank secrecy law nixed

Source: The Daily Tribune
Kim Henares
Kim Henares
A ranking member of the House of Representatives yesterday blasted Bureau of Internal Revenue (BIR) chief Kim Henares for her attempt to do away with the bank secrecy law in order for the agency to pry into the bank accounts of taxpayers.
Rep. Magtanggol Gunigundo, during the weekly Ugnayan sa Batasan Media Forum, reminded Henares that bank records are highly confidential and that information about bank depositors should not be revealed to third parties and even to law enforcers.
“The BIR is not thinking out of the box. The problem with its attitude is that it treats taxpayers as tax evaders. Taxpayers are nation builders. They should be treated with dignity and respect,” Gunigundo said yesterday, adding that under the Bank Secrecy law, bank officials are prohibited from disclosing the information of their clients to third parties, even to law enforcers. Such secrecy is only waived if the client gives the bank the consent to divulge his or her account details or if the client is being prosecuted for grave crimes such as plunder. The grave crimes, however, do not include tax evasion.
“When Congress drafted the Bank Secrecy law in the 1950s, there was a debate on whether we run after tax evaders or prevent individuals from hoarding money. What carried greater weight is the effect of individuals hoarding money in our economy. That is why bank records are absolutely confidential,” Gunigundo explained.
The Valenzuela City lawmaker stressed that a good tax regime has to impose simple tax policies instead of stifling the taxpayers.
“Taxpayers should not be lumped together as tax evaders. Otherwise, who would put money in our banks? People will keep their money to themselves. Money won’t circulate. Worse, foreign capital will leave the country,” Gunigundo stressed.
Ako Bicol Rep. Rodel Batocabe had opposed Henares’ proposal. He said that lifting the Bank Secrecy law for the BIR is not good for the country.
House Deputy Speaker Giorgidi Aggabao said Henares’ move is extreme.
“The solution of the BIR to ferret out tax dodgers by lifting the Bank Secrecy law is akin to using a sledgehammer to kill an ant. The solution is extreme and grossly disproportionate,” Aggabao said.
“I am not in favor that we lift our Bank Secrecy policy because it will erode the confidence of the public in our banking system. It is not the job of the banks to go after tax cheats. The only way for banks to help the BIR is through the AMLA,” Batocabe said referring to the Anti-Money Laundering Act which provides for a monitoring system for transactions over P500,000.
In the Senate, however, one senator at least backed Henares’ move to lift the bank secrecy law, saying he has always been in favor of lifting it but acknowledged that such a congressional measures will never get passed in the Senate and the House.
Sen. Sergio Osmeña lll stressed that he agreed that lifting the bank secrecy law would help improve tax collection as well as the government’s fight against tax fraud due to the the difficulty of going after tax evaders in the Philippines due to existing laws, as compared to other countries.
“In our country, when you say I’m violating the law, you have to prove it. When you say I’m evading taxes, you have to prove it. In America, it’s the other way around. When they say you’re evading taxes, I have to prove that I earned it and how I earned it so, so there it is easier,” Osmena said.
He said the House should pass the lifting of the bank secrecy act first, saying “I want them (House) to pass it first because if this (bill) is brought to the Senate, we can pass this here. But if the House does not act on this (bill) then it is just a waste of time.”
Gerry Baldo and Ange M. Rosales

No comments: