THE Securities and Exchange Commission (SEC) has partnered with the Bureau of Internal Revenue (BIR) in a plan to look into corporations’ beneficial ownership in tax enforcement.
In a statement on Wednesday, the SEC said beneficial ownership data could be used to promote tax integrity by revealing individuals who ultimately control legal entities.
The corporate regulator conducted a focus group discussion on Sept. 22, participated by BIR officials, which sought to facilitate cooperation in using beneficial ownership data to boost tax integrity and transparency.
According to the SEC, a beneficial owner is a natural person who “ultimately owns or exercises ultimate effective control over a corporation.”
Different from legal owners, that person might directly or indirectly have the power to vote or influence a company’s transaction decisions even without being reported as a stockholder, member, director, or officer.
Under SEC Memorandum Circular No. 15, series of 2019, the commission mandates the declaration of beneficial owners in the general information sheet, a required document submitted by corporate entities.
“Taxation is an important element of ensuring the economic stability of a nation,” SEC Chairperson Emilio B. Aquino said.
Meanwhile, the SEC said in a separate statement that it partnered with the United Nations Office on Drugs and Crime (UNoDC) and Open Ownership to tap the potential of using beneficial ownership data to fight corruption in the government procurement process.
On Aug. 31, the SEC and UNoDC organized a focus group discussion on beneficial ownership data use in public procurement. The activity was participated by officers from 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 discussions focused on the application of beneficial ownership in public procurement, highlighting the importance of data in mitigating corruption and improving the decision-making process of the procurement cycle.
“Beneficial ownership plays an important role in detecting indicators of bid rigging and conflicts of interest during the procurement process,” Mr. Aquino said.
“As such, it is important that we ensure there are few avenues for corrupt individuals to take advantage of the system,” he added.
In 2022, the SEC and GPPB-TSO signed a data-sharing agreement to improve public procurement and beneficial ownership transparency. — Revin Mikhael D. Ochave