EDITORIAL - A powerful tool
(The Philippine Star) - September 14, 2015 - 10:00am

Critics say this proposal is just a foil against efforts in Congress to cut income and corporate taxes, which could spell billions in revenue losses for the government. Regardless of the fate of the tax cut proposal, however, the government’s push to ease bank secrecy laws for tax purposes deserves serious consideration.

Revenue officials have pointed out that only three countries still prohibit the lifting of bank secrecy laws for tax purposes: the Philippines, Lebanon and Switzerland. The Swiss, who in recent years have turned over to countries including the Philippines billions stashed in their banks by corrupt despots, are said to be moving to ease their bank secrecy laws to deter tax evasion.

Apart from easing bank secrecy laws, revenue officials also want tax evasion to be included among the predicate crimes covered by laws against money laundering. Why tax evasion remains excluded is anomalous enough. American mobster Al Capone was nailed down not for the murders attributed to him and his gang but for tax evasion.

Making tax evasion a predicate crime and allowing revenue authorities to look into bank accounts for tax purposes could put behind bars gambling and drug lords, smugglers, carjackers and kidnappers.

The tax evasion net, of course, could also catch politicians who have resisted every effort to bring transparency to campaign finance and pass laws against racketeering. Many corrupt deals are rooted in the opaqueness of campaign contributions and expenditures. In victory, politicians continue to benefit from campaign donors, who readily shell out fat commissions to the winner in exchange for lucrative government deals.

Considering the record of revenue collectors, there are also valid concerns raised by various sectors about the proposal. The biggest concern, apart from harassment by revenue personnel, is the possibility that tax data can end up in the wrong hands and be used for extortion and even kidnapping. These concerns can be addressed in the proposed law being drafted by the government. Used properly, this measure can be a powerful tool against major tax evaders and corrupt officials.

 

AL CAPONE BANK CAMPAIGN EVASION GOVERNMENT LAWS LEBANON AND SWITZERLAND REVENUE SECRECY TAX
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