Albay Rep. Joey Sarte Salceda on Saturday said new laws were needed to enhance transparency in financial transactions and get the Philippines out of the Financial Action Task Force’s (FATF) “gray list.”
Salceda, chairman of the Committee on Ways and Means, said he would request the Bangko Sentral ng Pilipinas to draft a bill on the sanctions framework in reaction to the rating given this year by the FATF which retained the Philippines in its so-called “gray list.”
The FATF flagged the country for perceived “inadequacies” in the effectiveness of the targeted financial sanctions framework (TFS) for both terrorism financing and proliferation financing.
Salceda said the country might need to look at whether current bank secrecy laws would allow for more targeted sanctions.
“I don’t think our current bank secrecy laws would allow for effective targeted sanctions. I’ve been a strong champion of relaxing the bank secrecy laws for tax purposes. It may be time to relax them for targeted sanctions as well,” Salceda said.
“Until our banking system can be more transparent, we will struggle to impose targeted sanctions,” he added.
“That means accusations that our banks are a conduit for all sorts of terrorist and illegal transactions will persist. The BSP’s latitude for policy changes can only do so much. We need new laws for that,” Salceda stressed.
As chairman of the House tax panel, Salceda said he was studying the enactment of tax laws that would impose much higher taxes on seized illegally accumulated income and allow the use of evidence of tax evasion for the prosecution of other crimes. Maricel V. Cruz
Salceda called them the “Al Capone laws” referring to the notorious American gangster who was jailed not for murder, lawless violence, or any other crime, but for tax evasion.”
“Money is always the incentive for organized crime. And concealed money means some taxes are being skirted. Tax evasion is always easier to track as a lead for other crimes, because unlike other crimes, where circumstances can attenuate guilt, for tax evasion, the test is pretty simple: if you contrived a scheme to defraud the government, you’re guilty,” the Bicol solon said.
“The way we can use these tax laws to improve our FATF rating is by allowing the use of evidence for tax evasion in investigations for other financial crimes,” Salceda added.