September 13, 2024 | 12:00am
MANILA, Philippines — The tax cooperation convention drawn up by the Organization for Economic Cooperation and Development (OECD) is now in full force in the Philippines to address tax evasion in the country.
This came after the Senate passed a resolution concurring with the ratification of the Philippines’ participation in the Convention on Mutual Administrative Assistance in Tax Matters (MAAC).
In a statement, Finance Secretary Ralph Recto said MAAC would help stop tax evasion and avoidance in the country.
“This is 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,” Recto 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.
Jointly developed by the OECD and the Council of Europe in 1988 and amended in 2010, MAAC has been signed by 147 countries and ratified by over 100 countries.
Recto emphasized that MAAC would 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.
It will also allow the country to enter into agreements on simultaneous tax examinations and exchanges of information.
With the MAAC in place, the government can access tax information on 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 will also gain third-party information to support assessment and enforcement programs like the Bureau of Internal Revenue’s Run After Tax Evaders program.
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.
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