Purisima pushes global TIN system
Zinnia B. Dela Peña (The Philippine Star) - January 1, 2014 - 12:00am

MANILA, Philippines - Finance Secretary Cesar Purisima underscored the need to develop  a global system of tax identification numbers (TIN) to allow international monitoring of transactions by tax authorities and help curb tax evasion, fraud, bribery and corruption. 

In an interview, Purisima said the global TINs will serve as a form of “passport” for international trade and investment as to ensure that transactions are legitimate and verified by appropriate tax authorities.

The system,  once adopted, should assign every individual a unique global TIN, coded by country, similar to what is reflected in telephone numbers, he noted.

“There will be an area code so you know from where is the transacting party.  So when you remit money, you don’t need to get another TIN.  This will be serve as a  passport for international financial transactions,” Purisima said.

He said this would make it difficult for companies moving funds across different countries via shell corporations to avoid tax.

“We need this if we’re serious in our efforts to go against tax evasion and drug trafficking.  This will make it difficult for companies to move across borders,” he said.

Developing countries don’t have the tax or legal expertise to audit large corporations and often rely on these businesses to compute their own taxes.  As a result, some of these companies end up evading tax payments.

According to the World Bank and the Tax Justice Network, a non-governmental organization that advocates global tax transparency, yearly losses to corruption, smuggling and tax evasion combined are  estimated at $4.5 trillion to $5 trillion.

Purisima said this amount could be reclaimed by countries and used for infrastructure, education and other basic needs.

According to Purisima, the global TIN scheme would be supported by a central registry maintained by the International Monetary Fund or a similar multilateral organization, which participating countries would be able to access. 

Additionally, he stressed that international cooperation on trade should be linked to adopting the global TIN system.

“Once the global TIN scheme is implemented, it should be made a feature of free trade agreements signed between countries to ensure that free trade is fair trade as well. It is important that we give teeth to the international agenda against tax evasion with measures like this,” the finance chief added.

 

COUNTRIES FINANCE SECRETARY CESAR PURISIMA GLOBAL INTERNATIONAL INTERNATIONAL MONETARY FUND PURISIMA TAX TIN WORLD BANK AND THE TAX JUSTICE NETWORK
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