Philippines signs convention to fight tax evasion
MANILA, Philippines – The Philippines has signed a multilateral agreement to boost its efforts in fighting tax evasion and improving compliance of taxpayers.
Bureau of Internal Revenue (BIR) Commissioner Kim Henares, through special authority from the Office of the President, signed the Convention on Mutual Administrative Assistance in Tax Matters (MAC) in Paris last Friday.
The MAC, which was jointly developed by the Organization for Economic Cooperation and Development (OECD) and the Council of Europe, is a multilateral agreement promoting international cooperation for effective implementation of national tax laws.
An amending protocol, entered into force in 2011, is expected to assist developing nations secure the benefits of the new cooperative tax environment, including a multilateral approach for the automatic exchange of information.
“As the Philippines continues to grow, the government continues to look for ways to increase revenues to support this growth and ensure that critical investments in infrastructure and social services for our people are amply funded,” Henares said.
The BIR said the MAC will directly affect at least seven Run After Tax Evaders (RATE) cases estimated to amount to hundreds of millions of pesos.
“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,” said Henares.
Signing the agreement gives the Philippines an efficient and expeditious way of increasing its tax treaty network from 28 to 59 treaty partners.
It also saves time as well as financial, and human resources spent on negotiating and updating bilateral tax treaties, which usually take five to 10 years to complete.
The agreement also allows the BIR to obtain jurisdiction over non-resident taxpayers who have tax liabilities in the Philippines.
Being a party to the convention provides the Philippines access to the automatic exchange of information, assistance in recovery, service of documents, and the freezing of assets.
The Philippines is the 68th signatory to the MAC, which is currently in force in 22 countries while the protocol or amended convention is in force in 28 countries
