Palace open to amending AMLA

MANILA, Philippines – While it may be too late in the day, Malacañang served notice yesterday that it is open to amending the already-stringent Anti-Money Laundering Act of 2001 – specifically for what it dubbed as “perceived weaknesses.”

“If there are perceived weaknesses, the AMLC should initiate reintroduction of amendments to the AMLA,” Presidential Communications Operations Office Secretary Herminio Coloma Jr. said, referring to the Anti-Money Laundering Council.

Coloma issued the statement following pronouncements made by Commissioner Kim Henares of the Bureau of Internal Revenue who recently disclosed the alleged widespread money-laundering activities – or presence of dirty money – in the country.

“The Anti-Money Laundering Council is expected to act decisively on possible violations of the Anti-Money Laundering Act of 2001 that are detrimental to the country,” Coloma said.

“It is important to ensure the integrity of financial and banking transactions and to thwart illegal activities that are channeled through the country’s financial system,” he explained, when asked to comment on latest reports of money laundering involving P100 million.

 Lift secrecy laws

 In September last year, Coloma said the national government was willing to lower income tax rates for workers only if Congress could assure President Aquino that restrictive bank secrecy laws will be lifted before he steps down in June this year. 

“If the (legislature) will pass a law to lift bank secrecy for tax purposes and make tax evasion a predicate crime, there might be some room to adjust,” Coloma quoted Henares as saying.

The BIR chief’s pronouncements were made in reaction to the statement of Sen. Juan Edgardo Angara, who along with lawmakers – notably Speaker Feliciano Belmonte Jr. and Marikina Rep. Miro Quimbo in the House of Representatives – wanted a lower tax rate for workers.

“We are for status quo. There will surely be revenue loss from that proposal (adjust to inflation the taxable amounts per bracket in lieu of lowering income tax rates). And we do not think the (legislature) is willing to pass any revenue measure,” Henares added.

“Without it or any revenue measure, we will still be looking at an amount that the government cannot collect. We (the government) are not against lowering the tax rates per se. But we have to look at the overall effect on the country,” the BIR chief stressed.

Consult stakeholders 

In March 2014, Malacañang joined the fray regarding attempts by the BIR to lift the country’s decades-old Bank Secrecy Law, serving notice that all stakeholders must be consulted before it can be implemented. 

Coloma highlighted the importance of having a strict law that protects the secrecy of bank accounts of depositors, but warned that such a proposal to lift the Bank Secrecy Law has widespread implications.

Sens. Francis Escudero, Grace Poe, Vicente Sotto, Nancy Binay and Angara have expressed concern over the plan of Henares to lift the bank secrecy law for tax purposes.

Henares said the move is in line with the country establishing a single and global standard in tracking tax fraud.

The lawmakers suggested that a study should first be conducted on the impact of the proposal on the confidence of banking industry players in the system.

Escudero said existing laws, including the bank secrecy law and the Anti-Money Laundering Act, authorize the BIR to conduct financial probes on certain individuals for tax purposes.

“Any move to force private individuals to open their bank accounts for government scrutiny might be too much,” Escudero warned.

“The current exceptions to the bank secrecy law such as corruption investigation and AMLC’s powers on private individuals, I believe, are sufficient,” he added.

On the other hand, the Koalisyon ng Daang Matuwid capitalized on the issue by drawing Vice President Jejomar Binay into the discussion.

Coalition spokesman and Akbayan Rep. Ibarra Gutierrez said the AMLC should tap Binay in its efforts to curb the scheme as an “expert.” – With Alexis Romero