Department of Finance bucks bank secrecy exemption

MANILA, Philippines — Finance Secretary Carlos Dominguez III has opposed a bill that seeks to exempt public officials from the Bank Secrecy Law.

In an interview, Dominguez said exempting public officials from the law is a “nonsense” move, adding that all individuals – whether they are public officials or private employees – should be covered by bank secrecy.

House Bill 7146, filed by Bayan Muna party-list Rep. Carlos Zarate, seeks to require public officials and employees to execute a written permission allowing authorities to examine, inquire or look into their bank deposits.

But Dominguez clarified that the Department of Finance (DOF) is still pushing for the relaxation of the Bank Secrecy Law by empowering the government to open and investigate the accounts of individuals who are suspected of tax evasion or corruption.

“The bill we are supporting is for everybody to be open, but subject to suspicions and evidence of tax evasion,” he said.

Amendments of Republic Act 1405 or the Law on Secrecy of Bank Deposits are part of Package 1B of the administration’s Comprehensive Tax Reform Program (CTRP).

Aside from the amendments, the package includes provisions for a tax amnesty program and adjustments in the Motor Vehicle User’s Charge.

Package 1B was supposed to be part of the Tax Reform for Acceleration and Inclusion (TRAIN) Law and had even secured approval from the House of Representatives plenary. But the provisions were not included in the final version approved by the bicameral committee.

According to Dominguez, the Senate has committed to pass by the end of this month Package 1B of the CTRP.

“It’s in the Senate now. They said (they will approve it) by the end of March,” he said.

Earlier, the DOF warned that without Package 1B, the country’s fiscal deficit may widen to 3.3 percent.

The package, according to DOF, is estimated to provide additional fiscal space of about P38.9 billion. In addition to the P89.9 billion in incremental revenues expected from the TRAIN, this will result in about P128.8 billion more this year.