MANILA, Philippines – Internal Revenue Commissioner, Kim Henares, has signed a multilateral agreement on mutual administrative assistance in tax matters on behalf of the Philippines. This is in line with the country’s efforts to step-up its involvement in global measures against tax evasion.
Henares signed the agreement last Friday in Paris, at a convention created by the Organization for Economic Cooperation and Development (OECD) and the Council of Europe to foster international cooperation towards the effective implementation of national tax laws.
The convention seeks to assist the progress of a spirit of cooperation between countries across the globe for more efficient implementation of tax laws, while upholding the basic rights of taxpayers. It likewise promotes administrative cooperation between states, in order to properly assess and collect taxes, so as to lessen the instances of tax avoidance and evasion.
“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,” Henares said.
The Philippines has become the 68th country to sign the agreement, which supports the Group of Twenty’s (G-20) push for the automatic exchange of information between countries to become the new international tax standard for information sharing.
The G-20 – a group of finance ministers and central bank governors from 20 major economies: 19 countries, plus the European Union – is responsible for generating 85-percent of the gross world product and 80-percent of world trade.
As signatory to the agreement, the Philippines stands to benefit, as follows:
• The agreement provides the country with a faster and more efficient way of increasing its tax treaty network from 28 to 59 treaty partners.
• Saves time and resources spent on negotiating and updating bilateral tax treaties (usually completed in a period of five to 10 years)
• Gives the BIR the authority to obtain jurisdiction over non-resident taxpayers with outstanding tax liabilities in the Philippines.
• Gives the country access to automatic exchange of information, assistance in recovery, service of documents, and the freezing of assets.
“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.