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AMLA’s evasion of the tax issue

(Article Published in the March 14,2013 issue of Business Mirror)

       Section 11 of Republic Act No. 10365, the latest amendment, of so far four, of our Anti-Money Laundering Law, Republic Act No. 9160, inserted a new Section.

       The new Section 20 reads as follows:

       Section 20. Non-intervention in BIR operations.—Nothing contained in this Act nor in related antecedent laws or existing agreements shall be construed to allow the AMLC to participate in any manner in the operations of the BIR.

       Seen by itself, it sounds as a prohibition addressed to the AMLC against using the AMLA, as amended, or any of the international agreements to which the Philippines is a signatory, as authority to help the Bureau of Internal Revenue collect taxes.

       But seen in the context of what had been proposed to Congress and what Congress eventually agreed to pass, Section 20 is as best (or, as the bitter may prefer, as worst) as legalese can be. It is really a prohibition against the BIR to invoke the AMLA in aid of its tax collection endeavours.

       When RA No. 10365 was still in the House of Representatives as House Bill No. 6565, among those listed as “predicate offenses”, were “violations of Sections 254 and 255 of the National Internal Revenue Code of 1997, as amended.” Sections 254 and 255 of the NIRC refer, respectively, to attempt to evade or defeat tax and failure, among other infractions, to file tax returns, provide required tax information, and pay the tax.

       It was clear, in the lower house bill that was passed as early as September 2012, that the Congressmen wanted tax evasion as a serious instance of “unlawful activity” the proceeds of which ought not to be disguised as clean. Accordingly, they sought to amend also Sections 6(a) and 6(b) of the AMLA.

       Section 6(a), as they intended to amend it, insists that a money launderer can be made liable both for committing the acts made criminal by the AMLC as well as “for tax evasion on income derived from any unlawful activity herein defined.” Section 6(b) buttressed this by stating that the proceedings that are brought to establish the commission of “tax evasion on income derived from the unlawful activity which shall be prosecuted by the BIR” shall be given precedence over the prosecution of any offense proscribed by the AMLA, without prejudice, of course, to the freezing and other remedies provided in said law.

       Clearly what the Congressmen wanted, as reflected in their bill passed before 2012 ended, was to make tax evasion a predicate crime and the disguising of the proceeds of tax evasion a money laundering offense. The same sentiments are found in the Senate version, Senate Bill No. 3132. Senate Bill No. 3123 was passed nearly six months after the passage of HB No. 6565, on this year’s Valentine’s day when citizens of this country, seniors as well as juniors, are caught up in the hail of arrows from Cupid or their imaginations thereof. In this one rare instance, the Senate and the House of Representatives were one.

       The Grim Exciser, or the ruthless mower, must have entered the room of the Conference Committee, which is acknowledged to be the third chamber of Congress. He (or lest the feminists take offense, she) cut out the provisions in the passed bills of both houses relating to tax evasion. Then she/he grafted in, as an elite corps of medical practitioners now routinely implant anatomical enhancements, the aforequoted new Section 20 of RA No. 10365.

       On whose orders, or upon whose inducements, or for what reasons or in whose interests, did the Grim Exciser cut out tax evasion from the anti-money laundering scene? Your guess is as good, if not better, than mine.

       What is clear to me is that we Filipinos never wanted an anti-money laundering law. Right from the very beginning, we dragged our feet in complying with the “suggestions” from the Financial Action Task Force. We had to be placed in the “uncooperative” or black list mid-2000, to the great suffering of our OFWs sending money in and students and researchers abroad needing money out, before we were prodded into passing R.A. No. 9160. Money laundering legislation had always been a bitter pill to swallow.

       And so we deal with the dilemma, of being caught between a rock and a hard place, the Filipino way. We move little by little, bit by bit, going inch by inch instead of running in leaps and bounds. But, just when time and tide can wait no longer, we eventually get there.

       The way we make our laws demonstrate that the weaknesses and the strengths of our legislative process are faces of the same coin of Philippine democracy. A coin that is now stronger than the currency of the nations who were once our masters.