Philippines signs treaty on tax info sharing

THE PHILIPPINES has signed up to a multilateral treaty that will allow it to share information on potential tax evaders with other countries, including the US and financial hubs Singapore and Switzerland, the Finance department yesterday said in a press release.

The country, through Internal Revenue Commissioner Kim S. Jacinto-Henares, became the 68th signatory to the Organization for Economic Cooperation and Development (OECD) Convention on Mutual Administrative Assistance in Tax Matters (MAC).

Ms. Henares was granted a special authority from the Office of the President to sign the agreement in Paris on Sept. 26.

The agreement, the OECD said on its website, “is the most comprehensive multilateral instrument available for all forms of tax cooperation to tackle tax evasion and avoidance, a top priority for all countries.”

The Bureau of Internal Revenue (BIR) said the agreement will equip the country in its nearly a decade-old campaign against tax cheats as it gives the tax agency “jurisdiction” over non-residents that owe the Philippines taxes.

Earlier signatories to the treaty include tax havens Switzerland and Singapore, and the US, according to a list available on the OECD website.

“Being a party offers the Philippines several forms of assistance, including automatic exchange of information, assistance in recovery, service of documents, and the freezing of assets,” the Finance Department said in the statement.

BIR said the latest agreement will bolster the government’s criminal suit against at least seven individuals.

The seven cases were filed under the BIR’s Run After Tax Evaders (RATE) Program, but Lawyer Estela V. Sales, BIR Deputy Commissioner-Legal and Inspection Group, did not identify them, only saying those with properties abroad will be directly affected by the agreement.

“Being a party offers the Philippines several forms of assistance, including automatic exchange of information, assistance in recovery, service of documents, and the freezing of assets,” the Finance Department said.

“Every tool we use to enhance our country’s revenue generating capacity is a weapon we take to the fight for every Filipino’s right to have quality public goods and services,” Ms. Henares was quoted as saying in the statement.

The BIR has filed a total of 301 tax evasion cases since 2010. Broken down, 269 complaints are pending before the Department of Justice (DoJ), 28 are lodged before various tribunals while the remaining four cases have been dismissed with finality.

“Signing the agreement gives the Philippines an efficient and expeditious way of increasing our tax treaty network from 28 to 59 treaty partners, saving time, financial, and human resources spent on negotiating and updating bilateral tax treaties, which usually take five to ten years to complete,” the Finance Department said.

The Philippine Senate should ratify the treaty for it to enter into force.

The multilateral treaty was developed jointly by the OECD and the Council of Europe in 1988 and amended by Protocol in 2010. -- Mikhail Franz E.Flores

source:  Businessworld