The Department of Finance (DOF) has welcomed the passage of a Senate resolution concurring with the ratification of the Philippines’ participation in the Convention on Mutual Administrative Assistance in Tax Matters (MAAC).
In a statement, the DOF said this will help stop tax evasion and avoidance in the country.
The MAAC is the most comprehensive multilateral instrument available for all forms of administrative cooperation between signatories in the assessment and collection of taxes.
Finance Secretary Ralph Recto said he expects the MAAC to 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.
It also allows the Philippines to enter into agreements on simultaneous tax examinations and exchanges of information.
With the MAAC in place, the 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 will also gain third-party information to support assessment and enforcement programs like the Bureau of Internal Revenue’s Run After Tax Evaders Program.
“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,” finance secretary Ralph Recto said.
“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,” he added.
The MAAC was jointly developed by the Organisation for Economic Co-operation and Development and the Council of Europe in 1988 and amended by the Protocol in 2010.
It has been signed by 147 countries and ratified by over 100 countries.
“With the ratification of the MAAC, we are empowering our country to combat deceptive tax evasion methods. Those who use complex strategies to avoid their responsibilities will no longer be able to escape.,” Senate Committee on Foreign Relations Chair Imee Marcos said.
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.
