Declaring dollar deposits would lead to double taxation, says former BIR exec



New SALN form. Photos by Karen Boncocan

MANILA, Philippines—Declaring foreign currency deposits as required in the new Statement of Assets, Liabilities and Net Worth (SALN) form may not be a good idea for government officials and employees, a veteran tax collector claimed Saturday.

Estrella Martinez, an accountant and lawyer who spent 32 years with the Bureau of Internal Revenue, said a declarant would expose himself to “double-taxation” in the event he includes foreign currency deposits, stated in peso equivalents, in her or his SALN.

“You will be digging your own grave,” she told the Inquirer in a phone interview, the day after the Civil Service Commission released its new guidelines for the filing of SALNs for 2012.

Martinez said foreign currency deposits are already subject to a 7.5-percent final withholding tax under the Tax Code. Another provision in the same law imposes a separate 32-percent tax on the “increase in net worth,” she said.

Under the new CSC guidelines, “cash on hand and in bank, as well as stocks and the like, denominated in foreign currency shall be converted into the corresponding Philippine currency equivalent.”

The conversion rate will be based on the “rate of exchange prevailing as of December 31 of the preceding calendar year.”

“At this juncture, the government employee is exposed to double-taxation under the Tax Code,” Martinez warned.

“Lamentably, if (foreign currency deposits) will be converted into peso denomination, there will be a tsunami of tax evasion (cases) since any increase in net worth is always taxable. Anybody can ask the old-timers in the BIR. Ignorance of the SALN law excuses no one from the tax consequences thereof.”

Martinez said requiring government employees to reveal dollar accounts in the SALN would also go against the Foreign Currency Deposit Act.

She cited a Supreme Court ruling that “enunciated a principle that if there are doubts in upholding the absolute confidentiality nature of bank deposits versus affirming the authority to inquire into such accounts, then such doubt must be resolved in favor of the absolutely confidential nature of foreign currency deposits.”

“Any exception to the rule of absolute confidentiality must be specifically legislated,” she added.

During his impeachment trial last year, former Chief Justice Renato Corona used the same argument in explaining why he did not declare some $2.4 million in bank deposits in his SALN. But senators sitting as judges in the quasi-political proceedings did not buy his arguments and convicted him.

Martinez said a declarant could “waive his right to absolute confidentiality” on his foreign currency deposits. But she said they should be included in the SALN only as a “parenthetical disclosure” so it would not unnecessarily jack up his net worth.

“If you convert the foreign currency deposit, your net worth will skyrocket,” she said.

Martinez said her position on the matter should not be misconstrued as assisting government officials in hiding ill-gotten wealth. “I’m just explaining the law. The law is there to be implemented,” she said.

All government workers, from President Benigno Aquino down to the lowest administrative aide, are required to submit their latest SALN on April 30 this year.

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  • marienkind


  • aeon888

    So how about Manny Pacquiao?

    He has so many US commercial tv ads from Nike, Wonderful Pistachios, Hewlett-Packard Computers, expensive Hennessy wines, etc.. . I bet he got paid a lot. I wonder if he needs to pay taxes for that too. Just asking…

    • Loggnat

      It is more than likely taxed in the US so it could be exempted from tax in the Philippines, but I could be wrong. :))

  • akoombulator

    kahit yung single taxation lang mabigat na sa bulsa

  • berong

    heto rin ba yung taga BIR na nagmamagaling noong impeachment trial na kinain yung sinabi?bat ka mado-dobol taxation (kung meron man) ,di naman nire-require na sabihin mo yung amount ng dollar account mo.pwede mong I-declare sa pesos by converting nga sa rate preceding year-end rate.

    • Danny Larona

       you dont get the point also pare

    • Mike

       i don’t get it..this is SALN and not ITR, I believe SALN is just mere declaration of once worth and never be the basis of Tax computation..

      • doncleo

         tama ka Mike..ang makikita lang naman dyan kung nadadagdagan ang assets mo mula nang pumasok ka sa gobyerno..kapag sobra ang ilinaki na hindi proportionate sa kita mo ay maaaring maging basis yan  para malaman kung may anomalya kang ginagawa( unexplained wealth)..yung mga nasa loob ng SALN ay may kanya-kanya naman na binabayaran e kagaya ng real property tax sa ariarian mo a kaya ay tax sa interest income ng deposito sa banko..hindi ko alam kung bakit nagkakagulo sila?..kapag honest ka sa declaration mo wala ka problema..

  • Raymond


    • Danny Larona

       you don’t get the point pare.

    • Mike

       that would depend on where you resides..OFW/Permanent Resident/Green Card Holder or any Filipino citizen working abroad are require to file ITR or taxed by the host country and not the Phils

    • IbigMongSabihin

      mention mo specifically ay US at Philippines. simple answer ay di allowed ng Philippines taxation laws ang double taxation if you are a dual citizen. hindi rin ito allowed ng US taxation laws.
      specific cases: pag ang residence mo ay USA then you must pay income tax sa US at di ka na required to pay income tax sa Pilipinas. pag ang asset mo ay nasa Pilipinas ay required ka to pay property tax sa Pilipinas at di ka required to pay property tax sa US, and vice versa.  therefore, there is no double taxation.

  • basilionisisa

    i don’t get the taxation on deposits whether in US dollars or pesos, I thought tax is only on the INTEREST of these deposits, or in case of Investments like stocks, on the DIVIDENDS only, ie on your EARNINGS only not on the gross of your assets. SALN is very confusing indeed. please explain and publish details on various newspapers and via online on the BIR website.

    • IbigMongSabihin

      your philippine peso deposit ay walang tax pero ang interest nito ay may tax…. your dollar galing sa ibang bansa papunta sa Pinas ay kinukunan na agad ng tax ng philippine bank para sa gobyerno kaya tax-deducted na iyong amount appearing sa bank book mo para sa iyo. ang interest ng dollar deposit mo ay subject din sa tax.

      • ed_nique

        what is the rate imposed on this $$$ that is brought in? is there a table of the rate to be imposed or is it based on the income tax range bracket?

        there was a question about pacquiao’s endorsements abroad and fight purses. presumably taxes were deducted where it was paid. if it is considered as income tax, is that not double taxation?

  • Bebang

    darling, hindi naman siguro nakataga sa bato ang TAX CODE.  e di baguhin ang method ng computation para maiwasan ang double taxation na iyan.  ang punto pa rin ay REQUIRED i-declare LAHAT ng assets and liabilities ng sinumang gustong manungkulan sa pamahalaan.

    • IbigMongSabihin

      para mabago ang sinasabi mo ay dapat muna ito maging batas. at dahil wala pa namang batas para maiwasan ang double taxation ay magkakaroon ng double taxation.

    • doncleo

       ang tanong ko…bakit ba nagkakaroon ng Dollar Account itong mga opisyal ng gobyerno eh maliliit lang naman ang sweldo nila?..tumaas man ay hindi pa din kaya ng lifestyle nila..malamang NAGNANAKAW SILA tapos mag oopen ng dollar account para doon itago kasi hindi ito pwedeng pakialaman dahil sa bank secrecy law…Kuha nyo?

  • basyong

    well these senatongs are dirtier than former cj corona.corona never wanted to dig his own grave that s why he never declared them.why was he convicted by these senatongs when they know that it is being done by everybody? there is no sacred cow when it comes to dollar me,senatongs,tongresmen everybody wanted to hide them so they cannot be double tax.i am pretty sure abnoy is doing the same thing that s why nobody in their right mind will do it.reality dictates this is rule of the game so why senatongs made this an issue to corona when all of them have their hidden dollar account and convicted people have to judge them and convict all these senatongs to be worst than corona.

    • latino_boom


      • basyong

        hehehe anything you want to say you i di ot?

  • George Lapulapu

    SALN is only for government employees. 
    my question is, if the government employee spouse is an off and the government employee receives allotment in foreign currency denomination in their joint account, will that be reported in the SALN?

    • ed_nique

      it’s a joint account

  • Albert Einstien

    there is NO DOUBLE taxation even if it is already CONVERTED to pesos….if the final tax already withheld on the dollar deposit… converted fc  can be classified as converted FC to peso…a parenthesis or foot note will do…it is NOT even a VIOLATION of the FCDA because it is an sine qua-non & LAWFUL REQUIREMENT of PUBLIC OFFICE….those who do not follow should get out of the PUBLIC SERVICE they have NO business being there if mere declaration can not be made outright…the corona impeachment is wrong because the alleged crime of wrongful declaration can STILL be subject to correction or has NOT RIPEN to a FULL crime yet…besides NON-DECLARATION would not constitute an IMPEACHEABLE OFFENSE….it’s pre-mature … not even a perjury yet… 

    • wawa2172

      Mali ka diyan, all declaration in SALN must be taxed else tax evasion ang sasapak sa iyo. Why convert dollar account to peso when conversion flactuates from time to time. Baka ma accuse ka pa nang misdeclaration. Kung ang account ay dollar then yon dapat ang e declare at wala nang conversion. Maraming loopholes ang conversion at pwedi itong gamitin para mang harass nang tao.

      • Albert Einstien

        very basic po yan…once taxed it can no longer be subject to tax again…unless there is an increase or additional income…if the SOURCE of FC was not taxed of course it is subject to taxation….it is imprescriptible…..ONLY INCOME are taxed not fluctuations or assumptions ( with exception to cgt on zonal valuations bec. it is fixed by law )…..kaya maganda yan yung mga TAX EVADERS na nagtago sa FCDA mahuhuli ng BIR….lol

    • doncleo

      yes, an error in the entry of SALN is  subject to correction or amendment, . however, he was deliberately not declaring all his assetes in his SALN for several years…given his stature, he cannot claim ignorance of the fact it is this knowledge which he used to run around the law twisting its real meaning, intent and purpose… .non-declaration does not constitute an impeachable offense of course but breach of public trust due to dishonesty…just like eating the forbidden fruit was not the first sin but eating it is disobedience..

  • bogli_anakdami

    wow… bakit may dollar account ang mga flips?  dolyar na ba ang monetary exchange dito sa flipland???… at sinong kumpanya ang nagpapasweldo ng dolyar???

    • Masterful Deceit

      This is the 21st century bogli.

    • George Lapulapu

      another pseudo american who cant acccept the fact that Filpinos need not suffer the chill of winter to have dollar account. and hey we ave starbucks here as well, and your McDonald got beaten by homegrown Jolibee.. and wana try our Mcgregor or Mang Gorio, come here in Marbel, nuch better than your lard laiden McDonald. But no, we dont need your dollar. you need it when the US economy hits rock bottom.

      hahahaha it’s more fun in the US of A!!!

    • doncleo

       ikaw talaga Bogli kapag pumasok ka sira ang usapan…hahaha!!!

  • LegalJustice

    Declaring dollar deposits or foreign currency deposits would lead to double taxation –  per Ms.Estrella Martinez, an accountant and lawyer who spent 32 years with the Bureau of Internal Revenue.

    Who is this Ms. Estrella Martinez ? How did she pass the Bar Exam ? Definitely there is away to create protocol or  mechanics to avoid double taxation.

    Its simply attaching your supporting papers that you already paid the tax of your dollar account and explain why you have a dollar account and how you end up having a  dollar account – what is your source of income to have that dollar amount. duh !

    If you did not accumulated this through scrupolous transaction then they have nothing to worry in declaring it.

    • anu12345

       Martinez said foreign currency deposits are already subject to a 7.5-percent final withholding tax under the Tax Code. Another provision in the same law imposes a separate 32-percent tax on the “increase in net worth,” she said.

    • IbigMongSabihin

      your ignorant criticisms of those who explain existing laws exposed your lack of basic understanding of taxation laws and economics. anong supporting papers ang sinasabi mo, e wala kang maipapakitang papel dahil ang tax sa dollar deposit mo ay automatic deduction na ginagawa ng bank papunta sa government without any tax receipt para sa iyo. ang lalabas na dollar amount sa bank book or certificate mo ay tax-deducted na. now, once you declare this amount as an asset sa SALN ay lalabas na this is a newly acquired asset kaya naturalmente na subject ito sa local taxation law. the result is double taxation.
      not only that. ang interest nitong dollar deposit mo ay automatic din na kinukunan ng tax ng bank without receipt para sa iyo. this interest earned ay asset din and once you declare it ay magiging subject din sa tax. the result is double taxation. 
      hindi na dapat ka maging accountant o lawyer ka to know the above. just try depositing a few thousand dollars sa philippine bank for you to undrstand, at ng iwasan mo ang ignorant criticisms mo sa mga taong gustong magpaliwanag sa iyo like this Estrella Martinez. btw, this current practice and manner of dollar taxation was mostly formulated during the time of Marcos. siguro it is high time to review the dollar account taxation law.  

      • Loggnat

        I need some educating…. if the bank takes and forward a percentage of your dollar account deposit as tax to the government, will that transaction be documented in your dollar account statement? If it is not, how will one be sure that tax withholding was done instead of the bank just stealing it? Would not the account statement denotes the total amount received and then subtract the tax that was sent to the government? Every penny of the dollar deposit had to be accounted for including the amount withhold as tax, right? Is that true if the account holder deposits the dollar amount himself or is it only for the dollar deposits coming from other than the account holder ie. other financial institution, investment accounts, individual, etc.? It seems to me that there is a lot of information missing or unknown to make a proper and honest comment concerning the subject, don’t you think so? Not enough information, in my opinion.

      • ApoNiLolo

        You’re right in every aspect except about “without any tax receipt” part. I’ve got some dollar deposits in a TD account and every month I received a statement from the bank of all my account. It includes tax deduction deducted from interest of my dollar deposit. That “statement of account” can be used as a form of tax receipt.

  • anu12345

    So I will not declare it if it will violate my rights under FCDA

    • Masterful Deceit

      You can’t be faulted, if you do.

  • regd

    Yup, it’s the same lady who sang beautiful music and defended the then CJ atong. To this old lady, the dollar account is not an asset. Well, she was proven wrong! If she was wrong then, how can she be right this time?

    • Masterful Deceit

      Proven wrong by Lapid? by Enrile? by Cayetano? The same people who claims there is stink in the Senate and feigns ignorance on where that stink is coming from?

      A political court that passes a flawed judgement doesn’t prove anything except that in politics, the politician’s interests come first.

      • tsugtsug

         so, what’s your point? are you claiming that she wasn’t proven wrong?

      • Masterful Deceit

        Exactly. Very intelligent tsugtsug.

      • doncleo

         Very intelligent?? HA! HA! HA!

  • Rolly257

    Baluktot yang si Estrella Martinez.

    Can’t understand why media keep consulting her.

    • Masterful Deceit

      Intelligent people understand clearly why media keeps consulting her.

  • Masterful Deceit

    The issue is simple. There are contradictions in the laws and the Legislature needs to amend whatever needs to be amended.

    Meanwhile it is not up to them (the Legislature) to decide which contradictory law supercede the other as what happened in the Impeachment Court. Only the supreme court can interpret the law when issues such as this occurs.

  • Albert Einstien

    cpa-lawyer..maybe she   ALREADY forgot her laws & accounting…kahit accounting clerks,   at acctng or law students ALAM ..ang difference ng asset and income…she is confused…you dont TAX  an asset like only TAX ..income ( income payment or interest income ) …there is no such ANIMAL as cash-ASSET tax…..only INCOME tax, Business tax, Real property tax, transfer taxes, DST…. WOW!

    there is no DOUBLE taxation if FC was not subjected to prior INCOME tax if it is an income payment…EVEN tax EVADERS can EASILY outwit it….by saying that their FC source were a mere converted peso account which were previously taxed …and will show their PRIOR years ITR’s since 18 year old   or they can easily get away with a proof of LOAN ….tell that to your clients NO WORRY….just get a good top caliber  cpa-lawyer tax consultant….. lol

  • tsugtsug

    32 years sa BIR si estrella martinez, meron kaya syang dollar accounts? tanong lang po, hehehe.

    • Angel Divera

      Yes of course! Mayayaman mga tiga BIR, double taxation din kasi mga kompanya sa kanila, ayaw magbigay antay ka ilang buwan para magka license, kaya mapilitan sila mag under the table.

  • apojay

    The argument that “foreign currency deposits are already subject to a 7.5-percent final withholding tax under the Tax Code” is an attempt to evade declaring true income and net worth.

    If there is no need to declare foreign currency deposits, then what do we need anti-money laundering laws for?  Just convert dirty money into foreign currency and deposit it in a bank!

    Now that would make us the money laundering capital of the  world in no time!

    • scorpio15

      Oo nga nagkaro-on man ng mga Batas sa Pinas merong mga Conflict. Kaya tuwang tuwa ang mga Abogado. Meron na namang pagkaPerahan pag umabot sa Husgado.

      Maraming Magagaling sa Pinas at marami ring Bulok.

  • malek_abdul

    “If you convert the foreign currency deposit, your net worth will skyrocket,” – Of course your net worth will skyrocket because that is your true net worth. Pera mo pa rin naman ung foriegn currency di ba? Ang gustong palabasin ni Estrella Martinez ay i-declare mo ang net worth mo sa peso saving mo lang at ibukod mo ang foerign currencies. Ano klaseng analysis yan? Kaya nga dapat i-declare mo whether peso or foreign para hindi ka mapagbintangan na money launderer ka at tama ang nakasaad sa SALN mo. Bakit ba takot kayo na i-declare ang foreign currency niyo kung ito naman ay galing sa legal? Pag ang pera mo ay talagang pinaghirapan mo wala naman kokontra na hindi sa iyo ang pera. Example si Pacman…marami siyang dolyares at alam ng BIR at gobyerno na galing un sa pagbo-boxing niya. Hindi siya pwedeng sabihan na ninakaw niya mga pera niya.

    • Pitbulldog

      Taxable ang currencies na yan, peso or dollar depostits.  Martinez’s mainpoint is it might create double taxation nga dahil covered na ng tax ang dollar deposits at maaaring ma-tax pa ulit.     Yan ang pagka-gets ko sa sinabi niya.  At tama din si Corona sa side niya.  Ang mga Senador lang kasi, nasilo ng pork barrel ni P-noy abnoy.   May araw ka ring timang kang tamad kang presidente ka..

      • malek_abdul

        Halimbawa na-convert to peso ung foreign account…ung equivalent lang sa peso and na-convert but not necessarily mean na ung foreign account ay dapat i-convert sa peso literally. Of course kung ikaw naman ang may foreign account pwede mo naman i-declare ang natanggal na ang tax sa FA mo di ba? I think the main issue here is the true net worth of every politician and government employees to be declared as true and correct.

      • doncleo

        depende naman yata yan sa acquisition mo ng dollar…kung binili mo din yung dollar galing sa income mo ay hindi na dapat itax pa maliban sa interest income nung dollar deposit..ang labo ng analysis nya accountant na yan..parang tinuturuan nya  ang mga tao na huwag sumunod o dayain ang gobyerno…ano ba ang masama na i-declare mo ang true net worth mo?..kung sa legal lahat ang source of income walang dapat ikatakot..

  • Nong

    determining one’s networth thru the SALN should not be confused with the computation of individual income tax. these are two different animals as there guidlines are different.

  • ofwme2807

    bakit naman kasi itong Inquirer kung sinu-sino pa ang tinatanong ex-BIR CPA lawyer wala naman ng silbi yang ininterview nyo???di ba may connection yan kay dismissed at impeached SC thief justice Nato Corona hay naku kaya nga may kaso ngayong tax evasion yang pamilya na yan dahil sa criminal at wlang kwentang advise nyang pa-epal na Estrella Martinez na yan…never mind declaring forex accounts importante ma-avoid ang double taxation ganun??…matanong nga ano ba record nyan sa BIR nyang 32 years veteran na yan..magkano ba collection nya nung panahon nya…ano ba worthy accomplishment nyang babae na yan sa BIR meron ba?

  • leomar101

    CJ Corona was a victim of a vendictive president. If you were following the impeachment trial and is not a yelo lunatic, then you know that there was no case against Corona. Lahat ng nag convict kay Corona ay binayaran ng limpak limpak na pork money. Look at the case of his 46  land titles, millions of dollar accounts, the small lady, a mysterious lady in the garage, etc. hahaha.

  • Qc


    maraming nagpayaman sa pwesto lalo na BIR (it’s why BIR = BIGAY IKAW REGALO) customs public highways afp.  mga municipal level pa lang may mga payola ng dumarating bigay ng mga negosyante at inaalagaan sila at baka maging congressman governor senador o kaya ay presidente at malaki ang magiging pakinabang nila.  thru d years humaba ang address book (contacts) nila na NAGBIBIGAY NG PAYOLA.  iba ibang klase yan.  mayroong naghihintay lang at hindi garapal, mayroong nagpaparamdam “padalhan mo ng imbitasyon si mr ang” mayroong nananakot at mayroong hindi mo na kailangan takutin because his reputation precedes him (parang si don vito corleone basta kumalat lang ang usapan na siya ang tumumba doon sa dating gangster) ayun dumadating na ang pera NA ITINATAGO NILA  SA (INVIOLATE) FOREIGN CURRENCY ACCOUNTS.  of course martinez would like that.  if she stole money its where she would hide it. BIR pa?
    kung ikaw ay may reputasyon na panahon pa ni marcos ay nababalitang marami kang pinapatay o pinakulong mas malaki ang payola dumarating sa iyo galing sa mga intsik at sila ang pinakamalaking magbigay kung kaya ng magmudmod ng mga nakaw na yaman at mga co’s, he gave them to his cronies as dummies most of whom are chinese.  you think yang mga proxy ay naging presidente walang tigil ang dating ng pera.  if you remember the time of estrada na may nagpadala ng isang kahon P3million ang laman ay dapat daw yon ay coffee mugs.  BULLCRAP!!!

    it’s not true that the chinese are more hardworking than the filipino as many of these 2nd and 3rd generation chinoy wiil have you believe as many filipinos will take 2-3 jobs working as nurse aids many of these chinoys will find repulsive just to feed their family and provide them a better future. 

    the chinese need to play it fair.  he would rather bribe the public officials than provide better wages and basic benefit.  some of these companies were bailed out several times by the government yet will not play it fair with its old employees. nagpapaligsahan silang malagay sa forture’s richest, no shame at all. he will corrupt anybody until he comes to expect it, is consumed by it and finally demands it from everyone else.  IT NEEDS TO STOP!!!

  • RiverHorse

    magkano kaya dollars nitong si martinez?!

  • batukan

    right or wrong, these is what you deserve if you are a corrupt official. double taxation may even be lighter than be separated from office and charged accordingly

  • Maldi2

    This government is running out of funds that is so frustrated in making new monies out of people’s money.  What the heck!

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