MANILA, March 26 (Reuters) - The Philippines expects to be taken off a blacklist of non-cooperative tax havens after changing its banking secrecy law, and that should help foreign investment, the head of its main tax agency said on Friday.
In April last year, the OECD, a grouping of industrialised countries, placed the Philippines, Malaysia, Costa Rica and Uruguay on a list of countries failing to comply with agreed international tax standards. [ID:nL2421278]
“The secrecy of bank deposits will be waived as far as requests of foreign tax authorities on their taxpayers operating in the Philippines,” Joel Tan-Torres, the head of the Bureau of Internal Revenue, told a news conference.
“This will now take the Philippines out of the blacklist.”
President Gloria Macapagal Arroyo signed the law on March 5 that allows foreign authorities to check their nationals’ financial dealings in the Philippines, Tan-Torres said.
The non-cooperative centres were accused of harbouring tax avoiders who park billions of dollars out of reach of their home authorities.
“This stigma will no longer be with the Philippines which may have caused some investment hurdles in the past,” Tan-Torres said.
The government said being on the list had left it open to sanctions including a withdrawal of financing by multilateral institutions and a cut in aid from donor countries.
The waiver would apply to over 30 countries which the Philippines has a tax treaty with, and would also allow monitoring of Filipinos’ foreign transactions, Tan-Torres said.
“This is not a one-way exchange. The Philippines can also ask information about transactions, investments and income of Filipinos abroad,” he said. (Editing by John Mair and Neil Fullick)