Finance Secretary Ralph Recto said Thursday the Philippines’ participation in an international tax cooperation convention would help stop tax evasion and avoidance in the country.
Recto welcomed the passage of Senate Resolution No. 139, concurring with the ratification of the Philippines’ participation in the Convention on Mutual Administrative Assistance in Tax Matters (MAAC).
“We are very glad to finally have the MAAC in full force in the Philippines. To fund our people’s growing needs, we need more tools like this to enhance our revenue-generating capacity,” Recto said.
“This is definitely a crucial weapon in our arsenal to fight tax evasion that ultimately denies every Filipino’s right to have the quality public goods and services they deserve,” he said.
The MAAC is the most comprehensive multilateral instrument available for all forms of administrative cooperation between signatories in the assessment and collection of taxes. It was jointly developed by the Organization for Economic Co-operation and Development (OECD) and the Council of Europe in 1988 and amended by the Protocol in 2010 and was signed by 147 countries and ratified by over 100 countries.
Recto said the MAAC was expected to significantly improve tax administration in the Philippines as it gives the government access to data exchange, assessment and enforcement tools with over a hundred partner signatories.
It also allows the Philippines to enter into agreements on simultaneous tax examinations and exchanges of information (EOI). He said that with the MAAC in place, the government could access tax information of other jurisdictions; decrease the risk of a downgrade on the country’s tax transparency; and save time, financial, and human resources on treaty negotiations.
The Philippines will also gain third-party information to support assessment and enforcement programs like the Bureau of Internal Revenue’s (BIR) Run After Tax Evaders (RATE) program, he said.
To ensure the integrity of the cooperation, the MAAC contains safeguards to protect the confidentiality of information exchanged between tax authorities, upholding taxpayers’ right to privacy.
