House leaders reject lifting of bank secrecy law

MANILA, Philippines - Leaders of the House of Representatives yesterday rejected Malacañang’s proposal to scrap bank secrecy laws, saying it would discourage investors and could be used to persecute political opponents.

Malacañang earlier said it will support proposals from the Senate and the House to reduce income taxes if Congress will agree to lift bank secrecy to aid the Bureau of Internal Revenue (BIR) in digging up hidden deposits for tax purposes.

“I am against it (scrapping bank secrecy) because this will scare off local and foreign investors,” Speaker Feliciano Belmonte Jr. said.

“It’s a gambit against the idea of lowering income tax. My challenge to BIR is to expand the miniscule tax base of the country and start with the country’s richest families and those, although ostensibly not rich, who deport themselves with super expensive cars,” he said.

Leyte Rep. Ferdinand Martin Romualdez, leader of the independent bloc, said the proposal needs careful study and warned that it could allow the government to harass its political opponents.

“Passing this right now is ill timed because we have a color-blind government or selective in giving justice and not sincere in prosecuting violators of the country’s laws,” Romualdez said.

“This could be used as a tool for persecution or harassment against members of the political opposition. This government has a track record of demolishing the image of its enemies,” he added.

Valenzuela City Rep. Sherwin Gatchalian said while he fully understands the need to ensure the sound fiscal health of government through steady tax collections, Malacañang should also support measures that increase the purchasing power of workers, encourage them to increase savings and boost economic activity.

“More spending from the people actually helps increase tax collections. Secondly, inflation over the past decades has eaten up salaries,” Gatchalian added.

‘No tax relief until PNoy steps down’

But there will be no tax relief for workers until President Aquino steps down in June 2016.

Malacañang yesterday shot down workers’ hopes for a significant cut in their 30 percent income tax, saying the current tax collection policy will stay until June.

“The President prefers to stay the course for the remainder of his term in order to preserve and consolidate the gains achieved through sound management of macroeconomic fundamentals,” Presidential Communications Operations Office Secretary Herminio Coloma Jr. told reporters.

Coloma made the statement when asked if the Aquino administration is willing to heed the advise of the Joint Foreign Chambers (JFC) for the President to reconsider his stand against giving workers some tax relief.

JFC earlier said that contrary to Aquino’s belief, lowering the country’s current policy on individual and corporate income taxes – the highest in Southeast Asia – will not lead to any budget deficit but even spur investments and commerce.

Administration lawmakers led by Sen. Juan Edgardo Angara and Marikina Rep. Miro Quimbo have been pushing for the lowering of personal income taxes, saying that tax bracket systems have been stuck at 1997 levels.

But in an interview in Iloilo City last Monday, Aquino thumbed down proposals from administration lawmakers that seek to lower the income taxes of fixed-income earners, saying there is no government surplus to give public and private workers any tax relief.

DOF, BIR heads feed P-Noy wrong info?

Angara said yesterday Finance Secretary Cesar Purisima and BIR Commissioner Kim Henares may have been feeding the President the wrong information regarding the impact of the proposed measure reducing income tax rates for fixed-income earners.

At the weekly Kapihan sa Manila Bay, Angara frowned at the DOF’s recommendation to increase the expanded Value Added Tax (EVAT) from 12 to 14 percent.

“What I am wondering about is that nobody is pushing for the EVAT in Congress. So that only had come from Secretary Purisima and Commissioner Henares. I don’t want to use the word ‘brainwash’. Maybe slightly less strong word ‘inculcate’. They are inculcating to the President that if we reduce income tax, we have to increase the VAT,” he said.

Angara also noted how Purisima and Henares moved to hike the annual budgets of the DOF and BIR next year.

Angara described the DOF’s P54-billion budget for 2016 as “disgraceful” after the agency also allocated a portion to build new offices.

Angara and Senate President Pro-Tempore Ralph Recto scrutinized the DOF’s budget during deliberations at the Senate on Wednesday. Under the current year’s budget of the DOF, the Office of the Secretary and the Bureau of Customs pushed for the approval of P50 billion for the 2016 national expenditure program from P15 billion.

“That’s an increase of 220 percent. And yet, hinindian nila yung (they are opposing) tax reform,” said Angara, chairman of the Senate ways and means committee. – With Delon Porcalla, Christina Mendez