Gov’t dead set on lifting deposit secrecy

Following the joint endorsement of the Bangko Sentral ng Pilipinas (BSP) and the Department of Finance (DoF) on lifting the banks’ deposit secrecy provisions, Finance Secretary Carlos Dominguez III acknowledged the benefits this would create for the tax authorities should the proposal is legislated.

“(Lifting deposit secrecy) is absolutely necessary for proper tax administration and we are determined to see this passed,” Dominguez said.

He said while tax authorities may know someone is cheating on their tax obligation, they cannot gather the necessary information to prove it unless they have access to bank accounts.

“We’re not asking to look at it (but) for curiosity or for gossip. If we have a good reason that a crime is being committed, tax evasion, money laundering, (then) that’s when we’ll look at it,” Dominguez explained.

Unless access to deposit accounts is granted, collecting taxes from everyone will continue to be a challenge, he added.

Finance Undersecretary Antonette Tionko pointed out the proposal is consistent with global best practices.

“It is in compliance with our international obligations in the exchange of information. That’s why we need (the) lifting of bank secrecy” provisions Tionko said.

She argued the government is not “asking for something that is not standard” given that other countries practice it.

BSP Governor Benjamin Diokno earlier said the Philippines is one of only two countries that do not have the provision. The other jurisdiction is Lebanon.

“We are only (one of) two countries left. This is a very important tool to fix tax evasion. I advocate for it,” Diokno said.

Its adoption should also elevate the country’s status in the global anti-money laundering community should the proposal pass, he added.