BIR Orders Banks to Open Accounts of 'Tax Cheats'

Manila Bulletin, October 6, 2010 | Go to article overview
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BIR Orders Banks to Open Accounts of 'Tax Cheats'


MANILA, Philippines - The Bureau of Internal Revenue (BIR) on Wednesday issued a regulation that requires banks and other financial institutions to open the accounts of selected taxpayers suspected of cheating on their tax payments.Finance Secretary Cesar Purisima signed the guidelines based on the recommendation of BIR Commissioner Kim S. Jacinto-Henares.The still unnumbered regulations implements Republic Act 10021, allowing the BIR to provide foreign tax authorities with information they are seeking on bank deposits of individual and corporate taxpayers with dubious financial transactions, including money laundering. The BIR is not, however, precluded from using the same confidential information furnished by banks in going after tax cheats.Section 3 of the regulation states that "once information is gathered pursuant to a request for exchange of information under the international convention or agreement on tax matters, the BIR is likewise authorized to use for tax assessment, verification, audit, and enforcement purposes, any such information obtained from financial institutions." It further declares that "for the purpose of exchanging information pursuant to an international agreement on tax matters, the BIR commissioner is hereby designated as the competent authority. Any such exchange of information shall not constitute unlawful divulgence of information under the Tax Code of 1997."It imposes fines of up to P100,000 and imprisonment of not more than five years for "any officer, owner, agent, manager, director, or officer-in-charge of a financial institution that willfully refuses to supply the required information.

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BIR Orders Banks to Open Accounts of 'Tax Cheats'
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