Finance Secretary Carlos Dominguez III has ordered a lifestyle check on officials of the Bureau of Customs (BOC) and a forensic analysis of data, including the possible opening of bank accounts linked to fraudulent or corrupt activities, as part of the Duterte administration’s ongoing efforts to rid the agency of graft and corruption.

Relaxing the country’s bank secrecy law as a way to flush out corrupt government officials as well as tax dodgers in the private sector is one of the proposals that the Department of Finance (DOF) plans to submit to the Congress.

As an opening salvo, the BOC recently ordered the relief of Deputy Commissioner Arnel Alcaraz as officer-in-charge of its Enforcement Group, after President Duterte said he wants a certain Customs official suspended and removed from office for alleged corruption.

Alcaraz was replaced as OIC of the Enforcement Group by Isabelo Tibayan III, the director of the Enforcement and Security Service.

Asked in a media interview how he would direct BOC Commissioner Nicanor Faeldon to achieve zero corruption at the bureau, Dominguez said: “I think it has to start at the top, good example at the top that people do not accept bribes or are clean. I think the leadership factor is important, [that’s] number one.”

“Number two, we have to be smart about catching corrupt people. You cannot always catch them like, you know, playing cops and robbers. We have to catch them by …checking their lifestyle, checking their bank accounts, checking how many cars they own,” he added.

Dominguez recalled that when he assumed the post of secretary of the Department of Natural Resources (DENR) during the former Cory Aquino administration, he had held a dialogue with employees and one of them, in explaining why corruption exists in that agency, compared it to a river, and said that “if the source of the river is dirty, then all of them would be dirty.”

Asked whether he would order a lifestyle check on Customs officials, Dominguez said: “Absolutely.”

He said that on top of conducting a lifestyle check on Customs officials, the Department of Finance and its attached agencies would be doing a forensic analysis of data to expose corrupt officials, tax evaders and others involved in financial crimes.

“That’s why part of our legislative agenda is to make sure that the privacy laws on bank accounts will allow the government to look into the bank accounts of people that have very strong evidence of corruption or tax evasion,” Dominguez said.

“If we do not do that, we can hardly catch them. So we are going to ask the legislature to please …allow the government to look into the bank accounts of people suspected of corruption, tax evasion, and crimes like that,” he added.

The DOF has submitted to the Congress the first package of its proposed comprehensive tax reform program, which covers the lowering of personal income tax (PIT) rates and several measures to offset the projected revenue erosion from the PIT reductions.

On the administration side, the DOF is now in the process of implementing reforms in the BOC and Bureau of Internal Revenue (BIR) to make the tax system simpler, fairer and more efficient.

It has also asked the Congress to pass new legislation that will relax bank secrecy laws for tax fraud cases and include tax evasion as a predicate crime for money laundering.

The International Monetary Fund (IMF) has given its nod to the DOF’s comprehensive tax reform plan for being “net revenue positive with due attention paid to equity” and expressed support for the complementary proposal to relax the country’s bank secrecy law as part of this major overhaul of the Philippine tax system.

In a country assessment report released in September, a staff team for the IMF Executive Board said it “supports the authorities’ push for a comprehensive tax policy reform that is net revenue positive with due attention paid to equity.”

The IMF team said the “Staff supports the Department of Finance’s efforts to amend the bank secrecy law to allow the tax authorities access to individual bank account information and make tax evasion a predicate crime for money laundering in order to improve the efficiency and equity of revenue collection.”