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Philippines Gets Tougher On Tax Evasion

by Mary Swire,, Hong Kong

16 May 2016

The Philippines Department of Finance has tabled before the Congress a slew of amendments aimed at further strengthening the country's anti-money laundering and bank secrecy laws.

The amendments to Anti-Money Laundering Act 2001 (AMLA) are aimed at improving the Anti Money Laundering Council's (AMLC's) ability to safeguard the financial system from money laundering activities by authorizing the AMLC to issue subpoenas and ex parte freezing orders with respect to certain unlawful activities; and by adding unlawful activities that are exempted from the requirement of a court order before a bank inquiry may be conducted.

The amendments also seek to include casinos as covered persons under the law; increase the monetary penalty for administrative sanctions; and designate the Bangko Sentral ng Pilipinas (BSP) as the supervising authority over foreign exchange dealers, moneychangers, and remittance and money transfer businesses for purposes of the AMLA.

BSP Governor Amando Tetangco said: "The banking and financial system of the Philippines remains stable and strong. To respond to emergent risks and challenges, we are proposing a thorough update of the AMLA to further strengthen our regulatory institutions in safeguarding a robust financial system."

Amendments have also been proposed to the Bank Secrecy Law and the Foreign Currency Deposit Act to lift restrictions on bank secrecy of peso deposits and foreign currency deposits for tax purposes.

Finance Secretary Cesar Purisima said: "Developments in the past few months have created more impetus and pressure for what we have been advocating for the longest time: updating the laws governing our financial system for a more secure economy to flourish. Weaknesses and loopholes in our legal framework breed risk; we intend to stamp these out as best [as] we can."

Purisima added: "We are one of only three countries in the entire world where our tax administration cannot access bank transactions for tax evasion purposes. We are one of only two countries in the entire world where tax evasion is not a predicate crime to money laundering. While the tax gap has narrowed since 2009, we still have a long way to go in plugging the four percent of GDP lost to tax evasion. It's high time we keep up with international standards and pierce the veil [that] the unscrupulous few have conveniently hidden behind."

TAGS: court | money-laundering | compliance | Finance | Currency | tax | business | tax compliance | tax avoidance | law | banking | Philippines | enforcement | ministry of finance | tax authority | legislation | tax reform | currency | financial reporting | standards | regulation | penalties | legislation amendments | trade | Tax | Tax Evasion

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