Manila said on Thursday that it would now be able to investigate the offshore bank accounts of Filipinos as the government tries to clamp down on tax cheats.
The announcement comes a day after the finance ministry passed regulations that will allow it to swap bank information on individuals as part of an international convention on tax standards.
“Tax evaders now have nowhere to hide,” Finance Undersecretary Carlo Carag said in a statement.
Just five million people file their income tax returns, according to the Bureau of Internal Revenue, leading to chronic budget deficits and poor delivery of basic services.
The National Statistics Office said there were 39.0 million people in the labour force as of July 2010, while the population sits at 94 million.
The finance department said the regulations signed into effect on Wednesday fully enforces a 2009 law authorising the bureau to exchange of tax information with foreign counterparts.
The move immediately led the Organisation for Economic Cooperation and Development (OECD) to shift the Philippines into the so-called “white list” of countries that have substantially implemented tax standards, Carag said.
“With the recent OECD announcement… the Philippines can now request information on bank accounts abroad from other countries,” Carag added.
Internal revenue bureau spokesman Rey Mari told AFP the government agency intends to use all the weapons at its disposal to go after tax evaders.
Authorities have been waging a “name and shame” campaign by filing criminal charges against high-profile personalities and companies suspected of cheating the government out of taxes or import duties.