Bank secrecy laws don’t apply to the dead -- BIR chief

THE BUREAU of Internal Revenue (BIR) wants banks to provide the government with information on deceased clients’ assets as part of a drive to improve estate tax collections.

"One of the exemptions from bank secrecy laws is if it’s regarding an estate. So when you die, there’s no more bank secrecy," BIR Commissioner Kim S. Jacinto-Henares told reporters last week.

"So we’re asking them (the banks) to give us the bank statements of those persons who died for the past years. Maybe five years," she added.

The BIR chief said the agency wanted to see if estate tax payments corresponded with the actual assets of people who had passed away.

"For example, if someone who has died had P10 million in the bank and this suddenly disappeared, where did it go? When was the money withdrawn? If the depositor had already died when the money was taken out of the bank, then there’s a liability there," Ms. Jacinto-Henares noted.

She said the BIR would "require" banks to submit the statements, adding: "If they don’t, we will subpoena it." The agency wants to do this "within the year," Ms. Jacinto-Henares added.

Estate taxes -- levied on inherited assets -- have been tagged as a target area that could be tapped by the BIR for additional revenues.

Asset price hikes over the years should have led to higher estate tax collections, Finance Secretary Cesar V. Purisima has said. Annual estate tax takes, however, have always ranged between P850 million and P1 billion.
 
source: Businessworld