Weigh pros and cons of bank secrecy law lifting, BIR urged
Senator Nancy Binay. INQUIRER FILE PHOTO
MANILA, Philippines — Senators cautioned the Bureau of Internal Revenue (BIR) on Monday over its proposal to lift the bank secrecy law, one saying it has a “chilling effect” on the banking industry.
“Although I understand where Commissioner Kim (Henares) is coming from as far as taxation is concerned, but her proposal has a chilling effect on the banking industry since there are more disadvantages than advantages,” Senator Nancy Binay said in a text message.
It was Henares, who reportedly proposed the need to lift the bank secrecy law to fight tax fraud and enhance transparency.
Binay, a member of the opposition said there are still more pressing issues that need to be addressed like the problem on peace and order.
“Can BIR guarantee that the information will be for purposes and will not be used to commit crime or for political harassment? May exceptions na naman ang bank secrecy law (The bank secrecy law already has exceptions),” she pointed out.
Senator Grace Poe, an administration ally, also expressed apprehension, saying the proposal should be studied first and the banking industry should also be consulted.
“The public might lose faith in the banks if their accounts are made open to scrutiny by the BIR,” Poe said in a separate text message.
“If this happens the economy may suffer. Anyway, the BIR meantime has the ways and means to run after tax cheats pending any amendment,” she added.
Senator Juan Edgardo Angara, chairman of the Senate committee on ways and means, said the proposal has its costs and benefits and the government must determine if the benefits would outweigh the costs.
“The benefits are better tax administration by eliminating fraud, misdeclaration and concealment of income while collection, while the costs may include capital flight and loss of confidence in the banking system,” he said.
“But I think the Commissioner is correct that the trend is towards an easing of restrictions,” Angara said.
Senator Vicente “Tito” Sotto III, another opposition member, said he was neither against, nor in favor of the proposal but he suggested that the issue be formally brought to Congress so the lawmakers could debate on it.
“I suggest the BIR draft and file a bill in Congress so we can debate on the issue. Besides, that’s the only way to do it,” Sotto said.
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