House Ways and Means panel chairman and Albay 2nd district Rep. Joey Salceda thinks that Congress should legislate “Al Capone” laws to impose greater taxation on seized ill-gotten wealth and money laundering, as well as allow evidence of tax evasion to be used to assist in the prosecution of other crimes.
Salceda’s coined the phrase “Al Capone laws” as inspired by the late American gangster Al Capone who was arrested and convicted for tax evasion in 1931.
“Money is always the incentive for organized crime. And concealed money means some taxes are being skirted. Tax evasion is always easier to track as a lead for other crimes, because unlike other crimes, where circumstances can attenuate guilt, for tax evasion, the test is pretty simple: if you contrived a scheme to defraud the government, you’re guilty,” Salceda said in a press statement on Friday, April 8.
This, after the Philippines remained on the Financial Action Task Force’s (FATF) March 2022 “gray list” of countries which are burdened with strategic deficiencies in combatting “money laundering, terrorist financing, and proliferation financing.”
The FATF is an intergovernmental agency geared towards countering money laundering and terrorism financing.
“The way we can use these tax laws to improve our FATF rating is by allowing the use of evidence for tax evasion in investigations for other financial crimes,” the economist-solon said.
He further proposed the loosening of bank secrecy laws within the country to better impose sanctions on launderers and tax cheats.
“I’ve been a strong champion of relaxing our bank secrecy laws for tax purposes. It may be time to relax them for targeted sanctions as well...until our banking system can be more transparent, we will struggle to impose targeted sanctions,” he said.
Salceda then said that he would request the Bangko Sentral ng Pilipinas to begin drafting such legislation.
“That means accusations that our banks are a conduit for all sorts of terrorist and illegal transactions will persist. The BSP’s latitude for policy changes can only do so much. We need legislation,” he concluded.