Tax laws

‘Al Capone’ tax laws proposed to fight tax evasion

Billy Begas

House Ways and Means Committee Chairman Joey Salceda has called for the passage of “Al Capone” tax laws, or laws that will impose stiffer penalties on people who have committed tax evasion.

Salceda said he will study the enactment of tax laws that would impose much higher taxes on illegally apprehended accrued income and allow the use of evidence of tax evasion to prosecute other crimes.

Al Capone is a notorious American gangster arrested not for murder, lawless violence or any other crime, but for tax evasion.

“Money is always the incentive for organized crime. And hidden money means some taxes are bypassed. Tax evasion is always easier to follow as a lead for other crimes, because unlike other crimes, where circumstances can mitigate culpability, for tax evasion the test is quite simple: if you have designed a scheme to defraud the government, you are guilty,” Salceda explained.

Salceda said passing new tax laws would help remove the Philippines from the Financial Action Task Force (FATF) gray list.

The country is currently on the FATF gray list or is part of the jurisdiction under heightened surveillance for the risk of dirty money.

Salceda said he would ask the Bangko Sentral ng Pilipinas (BSP) to draft legislation on the country’s targeted sanctions framework after the FATF included the Philippines in its “grey list”.

The FATF flagged the country for alleged deficiencies in the effectiveness of the Targeted Financial Sanctions (TFS) framework for terrorist financing and proliferation financing.

Salceda said a more transparent banking system would help the country get off the gray list.