Posted on 11:27 PM, March 18, 2010 [ BusinessWorld Online ]
TWO LANDMARK LAWS -- one allowing the sharing of taxpayer information with foreign entities and another making it easier for Filipinos to secure land titles -- have been signed into law by President Gloria Macapagal Arroyo.
Approval of Republic Act 10021, or the Exchange of Information on Tax Matters Act of 2009, was prompted by the Organization for Economic Cooperation and Development’s (OECD) blacklisting the country as a tax haven last year.
"It is the declared policy of the State to promote and pursue tax environment that contributes in sustaining a favorable international investment climate and instills confidence in the adequacy and capacity of the country’s tax administration to comply with its commitments under existing international conventions or agreements on tax matters," Section 2 of the new law, signed by Mrs. Arroyo last March 5, states.
It allows the Bureau of Internal Revenue chief to inquire into bank deposits and other related information held by financial institutions following a requests by a foreign tax authority.
The new law likewise allows a foreign tax authority to examine the income tax returns of taxpayers in the country.
Local authorities had previously said they could not comply with the international tax information standard given bank secrecy laws, among others.
While the Philippines was quickly put on by the OECD on a "grey" list last year after local officials committed to pass relevant laws complying with an international tax standard, France last month said the country was on its list of tax cheat-friendly states.
Mrs. Arroyo, meanwhile, also signed into law Republic Act 10023, otherwise known as the Act Authorizing the Issuance of Free Patents to Residential Lands, last March 9.
It amended Commonwealth Act 141 or the Public Land Act.
The new law states that Filipinos who occupy untitled residential lands for at least 10 years -- down from the previous requirement of 30 years -- may apply for titles.
It also makes it easier for landowners to apply for titles as they simply have to apply for one at the Department of Environment and Natural Resources without the need to hire the services of a lawyer.
Landowners, however, will only be given titles as long as the land will be used for commercial purposes.
Banks are expected to benefit from the new law as the land titles can be used as collateral to secure loans from banks.
"This will boost lending since the landowners will now have collateral for borrowing," Chamber of Thrift Banks Executive Director Suzanne I. Felix said in a text message yesterday. -- G. S. dela Peña