Recto: PH's participation in MAAC to help stop tax evasion, avoidance

Finance Secretary Ralph Recto on Thursday said the Philippines’ participation in the Convention on Mutual Administrative Assistance in Tax Matters (MAAC) is seen to help stop tax evasion and avoidance in the country.

In a statement, Recto welcomed the passage of Senate Resolution No. 139, which concurred with the ratification of the country’s participation in the 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. 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,” the Finance chief said.

The MAAC, jointly developed by the Organisation for Economic Co-operation and Development (OECD) and the Council of Europe in 1988 and amended by the Protocol in 2010, is a comprehensive multilateral instrument available for all forms of administrative cooperation between signatories in the assessment and collection of taxes.

It has been signed by 147 countries and ratified by over 100 countries.

With the Philippines’ participation in the MAAC, Recto said that joining the convention would significantly improve tax administration in the Philippines since it gives the government access to data exchange, assessment, and enforcement tools with over a hundred partner signatories.

The Finance chief said it allows the Philippines to enter into agreements on simultaneous tax examinations and exchanges of information (EOI).

Moreover, Recto said the Philippine government can 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 country is also seen to gain third-party information to support assessment and enforcement programs like the Bureau of Internal Revenue’s (BIR) Run After Tax Evaders (RATE) Program.

To ensure the integrity of the cooperation, Recto said the MAAC contains safeguards to protect the confidentiality of information exchanged between tax authorities, upholding taxpayers’ right to privacy. —KBK, GMA Integrated News