FFE Magazine

Rival politicians agree vs. BIR on bank Secrecy

Rival politicians agree vs. BIR on bank Secrecy

Philippine lawmakers hesitant to lift Bank Secrecy Law.

 

Under Republic Act 1405 or the Bank Secrecy Law, releasing a person’s bank information without authorisation is a criminal offence. The Bureau of Internal Revenue (BIR) wants to lift this law, but so far their proposal has been met with hesitation by senators and the office of the president.

 

BIR said that there is a worldwide trend towards more relaxed bank secrecy laws today. Commissioner Kim Henares even warned that if the Philippines does not comply then it might get blacklisted in the world’s financial market. But more than just complying with global requirements, the commissioner said softening the Bank Secrecy Law ‘for tax purposes’ will help the bureau identify and chase after tax evaders.

 

However, the office of the president and senators from clashing parties for once agreed on something fully: to practice discretion when it comes to repealing the law.

 

Presidential Communications Secretary Sonny Coloma said ‘The Bank Secrecy Law is very important and that proposal will have wide-ranging implications.’ The office advised BIR and the Finance department to study the matter closely before making any proposals since ‘A lot of people have a stake on that issue.’

 

Opposition (Una) Senator Nancy Binay agreed with the office of the president’s sentiments, saying the proposal might create a ‘chilling effect’ in the banking industry. She was also wary of the possibility of it being used for political harassment, saying ‘Can the BIR guarantee that the information will be for purposes and will not be used to commit crime or for political harassment? There are already exceptions under the Bank Secrecy Law.’

 

Senator Grace Poe supported Binay, saying that people might lose faith in banks if the BIR wishes to open accounts without permission from the owners. She added that consultations with the bank industry are a must. Senator Chiz Escudero added that existing exemptions already allow BIR to examine certain individuals’ bank accounts as long as they are involved in corruption or criminal investigations.

 

Senators Sonny Angara and Tito Sotto have also mirrored what the others have mentioned. Independent Senator Sergio Osmeña III is the lone lawmaker in the upper house to have expressed his support of the BIR commissioner.

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