The SEC and BIR have formed a collaboration to investigate the beneficial ownership of corporations for tax compliance purposes.
The SEC announced on Wednesday that valuable ownership information can aid in maintaining tax honesty by uncovering the individuals who have ultimate control over legal entities.
On September 22, the regulatory body held a discussion with representatives from the BIR. The purpose of this discussion was to promote collaboration in utilizing beneficial ownership information to enhance tax integrity and promote transparency.
As per the SEC, a beneficial owner refers to an individual who has the ultimate ownership or control over a corporation.
Unlike the legal owners, this individual may possess the ability to vote or impact a company’s transaction decisions, even if they are not officially listed as a stockholder, member, director, or officer.
According to SEC Memorandum Circular No. 15, issued in 2019, corporate entities are required to disclose the identities of their beneficial owners in the general information sheet.
“According to SEC Chairperson Emilio B. Aquino, taxation plays a crucial role in maintaining the economic stability of a country.”
In a separate announcement, the SEC announced its collaboration with the United Nations Office on Drugs and Crime (UNoDC) and Open Ownership to utilize beneficial ownership information in combating corruption in the government procurement procedure.
On August 31, the Securities and Exchange Commission (SEC) and the United Nations Office on Drugs and Crime (UNoDC) collaborated to hold a focus group discussion regarding the utilization of beneficial ownership data in public procurement. The event was attended by representatives from various organizations, including the Philippine Competition Commission, House of Representatives, Office of the President, Office of the Ombudsman, Philippine Government Electronic Procurement System, and Government Procurement Policy Board Technical Support Office (GPPB-TSO).
The conversations centered on utilizing beneficial ownership in government contract assignments, emphasizing the significance of information in addressing corruption and enhancing the procurement cycle decision-making process.
“According to Mr. Aquino, the concept of beneficial ownership is crucial in identifying signs of bid rigging and conflicts of interest that may arise during the procurement procedure.”
He emphasized the need to limit opportunities for corruption within the system.
In 2022, the SEC and GPPB-TSO entered into a data-sharing agreement to enhance transparency in public procurement and beneficial ownership. – Revin Mikhael D. Ochave