Portugal’s president has refused to sign off the new banking secrecy law that allowed the Tax Authority access to accounts containing €50,000 or more.
Marcelo Rebelo de Sousa said the proposed change in the law would be patently inappropriate due to the sensitive process of consolidation in the Portuguese banking sector, the need not to undermine the confidence of depositors and investors, and the likelihood of the taxman displaying ‘an excess of zeal.’
The president does not believe the excuse from Brussels ‘about stamping down on tax evaders’ and accuses the government of going far further than is required by any current Community directive.
The head of state also states that banking secrecy is easy to get around for the taxman as "there are already numerous situations in which the Tax Authority and Customs service can access information normally covered by banking secrecy without requiring judicial authorisation, in particular where there is evidence of tax crime or where the citizen clearly has more assets than could be justified by his or her stated income.
Marcelo Rebelo de Sousa has been helped by the opinion of the National Data Protection Commission which in July 2016, questioned the proposed new laws and the principle of ‘proportionality’ which were not addressed by some last minute tweaks to the proposal.
The president also is annoyed that there had been no real public debate on the proosed law and cited the current chaos in the banking sector as good reason to leave off upsetting investors which we really should be encouraging.
The Social Democrats applauded the decision of the president. The vice-president of PSD, António Leitão Amaro, believes that the government's proposal was unreasonable and wrong and would deter investors.
This was the president’s third veto in six months.
Under a separate and agreed set of rules, from December 1st this year transfers from Portuguese banks to offshore accounts where the amount is €15,000 or more, will be notified to the Bank of Portugal.
Between 2010 and 2014, €10.2 billion was transferred from Portuguese accounts to offshore destinations with 50% of the value ending up in Hong Kong, Panama and the Bahamas.
The December change comes at a time when there is increasing international pressure for fiscal transparency and to stem ‘illicit financial flows,’ an issue that has been in the media with Swiss leaks, LuxLeaks, the Panama Papers and the Bahamas Leaks.
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Time for Pexit?