Government to comply with tax standards – Palace

MANILA, Philippines – The Philippine government remains committed to comply with internationally agreed tax standards drawn up by the Organization for Economic Cooperation and Development (OECD) countries, Malacañang said yesterday.

Press Secretary Cerge Remonde said the government is fully aware of the announcement of the economic grouping that included the Philippines in a list of countries that have not committed to the internationally agreed tax standards developed by the OECD and non-OECD countries.

OECD and non-OECD countries developed the standard that was endorsed by G20 finance ministers in 2004 and a UN committee on tax matters in October 2008.

It requires exchange of information on request in all tax matters and enforcement of domestic tax law without regard to domestic tax interest requirement or bank secrecy.

At the behest of the Group of 20 leaders meeting in London, the OECD named the Philippines, Uruguay, Costa Rica and the Malaysian territory of Labuan as the worst offenders, saying they had refused to adopt new rules on financial openness.

The list was made public as G20 leaders from rich and developing nations declared at their summit Thursday that the age of banking secrecy was over, and that they would no longer tolerate shady havens draining away badly needed tax revenue.

“While it is unfortunate that the Philippines has not been able to meet the timetable for review and implementation of these revised tax information standards, we are committed and confident to meet the requirements for us to be removed from the list of non-complying countries,” Remonde said.

Remonde pointed out the Philippine government has a strong record of compliance with international financial and government standards.

“And we are working diligently to ensure that our reform agenda meets the needs for the enhancement of our own tax code and these revisions are consistent with appropriate international standards,” he said.

Trade Secretary Peter Favila, also a member of the Bangko Sentral ng Pilipinas policy-making Monetary Board, said the Philippine government would take the necessary steps to ensure the expectations of the OECD are met.

“It is really up to us to prove them wrong,” Favila said.

Finance Secretary Margarito Teves also said the Philippines “is and has always been ready to comply with conditions that have been set by international organizations, such as the G20 group of countries.”

However, “a review of existing local legislation relative to banking secrecy as well as tax information secrecy” would have to be done by Congress, Teves said in a statement.

Teves said government agencies such as the Bureau of Internal Revenue and the Bureau of Customs are working under internationally accepted standards.

“Should there be a perceived limitation of the country’s compliance with international agreements as an effect of our present tax laws, it would be necessary, therefore, that a review of existing local legislation relative to banking secrecy as well as tax information secrecy must be done to remedy this,” Teves said.

BSP Assistant Governor and General Counsel Juan de Zuñiga earlier said the existing laws are sufficient to prevent the Philippines from being used as a depository of funds from foreigners avoiding taxes in their respective countries.

De Zuñiga pointed to Republic Act 9160, or the Anti-Money Laundering Law, which complies with international standards. –- Paolo Romero with Iris Gonzales, AP, Philippine Star