President Rodrigo Duterte has urged Congress to craft another general tax amnesty bill with provisions that will “break down the walls” of bank secrecy, include an automatic exchange of information and provide safeguards to ensure “truthful” tax administration in the country.
While he understood the legislature’s objective in proposing an unconditional latitude in the grant of amnesty, Duterte said, he thumbed down the measure because “the original objective will not be met under the proposed framework.”
In his letter to the members and leaders of Congress released by the Palace on Monday, Duterte said he vetoed a portion of Republic Act 11213, or the Tax Amnesty Act, because its “overgenerous and unregulated” implementation would harbor acts of tax evasion in the future.
“Without the provisions breaking down the walls of bank secrecy, setting the legal framework for us to comply with international standards on exchange of information for tax purposes, and safeguarding against those who abuse the amnesty by declaring an untruthful asset of net worth, a general amnesty that is overgenerous and unregulated would create an environment ripe for future tax evasion, the very thing we wish to address,” Duterte said.
“Without these measures, the government and ultimately the Filipino people will incur long-term substantial revenue losses.”
Duterte said the Philippines’ experience with the 2006 tax amnesty under Republic Act 9480 had shown that without enough safeguards and measures against tax evasion, “the objectives of an amnesty such as raising revenues and expanding the tax base cannot be fully achieved.”
Duterte said the general amnesty program was meant to give taxpayers a “fresh start” and signal the start of a fair enforcement campaign by the tax authorities.
“It is not meant to be abused for the gain of the few and the loss of the rest of the citizenry. These safeguards against tax evasion are estimated to contribute P76.6 billion to the public funds in the next five years, which we hope to use to better our infrastructure and services,” Duterte said.
“Given these, I ask Congress to pass another general tax bill that includes the lifting of bank secrecy for fraud cases, the inclusion of automatic exchange of information, and safeguards to ensure that asset or net worth declarations are truthful.”
Duterte expressed hope that with his recommendations, the general tax amnesty would meet both its tax administration and revenue purposes.
Presidential Spokesman Salvador Panelo said it was Duterte’s desire to lift the bank secrecy for fraud for transparency.
“He recommended that because you can’t really know the truth if it’s confidential. But if you lift it, your bank deposits can be checked easily, so you cannot lie about it. That’s the reason why,” Panelo told reporters.
“We are confident that the members of Congress will fulfill their duty to the Filipino people as mandated by the Constitution, which is, they should be honest in all dealings and they should pursue a policy of accountability and transparency in the realm of governance.”
On Thursday, Duterte signed the Tax Amnesty Act, but line-item vetoed its general amnesty provision except for the portions covering the estate tax amnesty and the amnesty on delinquency taxes.