The Department of Finance (DOF) expects that the Convention on Mutual Administrative Assistance in Tax Matters (MAAC) will enhance tax administration in the country.
This was after the Senate had recently approved the Philippines' participation in the MAAC, a global agreement for tax cooperation, aimed at curbing tax evasion and avoidance.
Finance Secretary Ralph Recto expressed relief at the MAAC’s full implementation, stressing its role in increasing the Philippines' revenue capacity to meet growing needs.
“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,” Recto said in a statement.
With this, the finance chief expects the MAAC to greatly enhance local tax administration, noting that “it gives the government access to data exchange, assessment, and enforcement tools with over a hundred partner signatories.”
“Furthermore, it allows the Philippines to enter into agreements on simultaneous tax examinations and exchanges of information (EOI),” the DOF added.
The MAAC is the most extensive multilateral agreement available for all forms of administrative cooperation among signatories in tax assessment and collection.
Jointly created by the Organisation for Economic Co-operation and Development (OECD) and the Council of Europe in 1988 and amended in 2010, the agreement has been signed by 147 countries and ratified by over 100.
According to the DOF, MAAC will enable the Philippine government to access international tax data, enhance tax transparency, and support enforcement programs like the Bureau of Internal Revenue’s (BIR) Run After Tax Evaders (RATE) Program..
“Sa ratipikasyon ng MAAC, binibigyan natin ng lakas ang ating bansa upang labanan ang mga mapanlinlang na paraan sa pag-iwas ng buwis. Hindi na makakatakas ang mga taong gumagamit ng masalimuot na estratehiya upang umiwas sa kanilang responsibilidad,” Senate Committee on Foreign Relations Chair Imee Marcos said.
(With the ratification of the MAAC, we empower our country to fight against deceptive tax avoidance methods. Those using complex strategies to evade their responsibilities will no longer be able to escape.)
The MAAC safeguards ensure the confidentiality of information exchanged between tax authorities and protect taxpayers' privacy. (Derco Rosal)