THE House of Representatives has passed two administration-backed measures that would help boost the country’s economy.
Led by Speaker Alan Peter Cayetano, Majority Leader and Leyte Rep. Martin Romualdez and Albay Rep. Joey Sarte Salceda, chairman of the ways and means committee, the lower chamber passed on third reading House Bill 304 or Passive Income and Financial Intermediary Taxation Act (PIFTA) and House Bill 300 or the amendments to Republic Act 7042 or the Foreign Investments Act (FIA).
Voting was 186 to six with two abstentions the congressmen approved PIFITA which aims at simplifying the taxation of passive income, financial services and transactions.
Salceda stressed that PIFITA will “rationalize the taxation of the financial sector so that it becomes simpler, fairer, more efficient, and regionally competitive.”
This bill is the fourth package of President Rodrigo Duterte’s tax reform program.
It aims to cut the number of tax rates on passive income, financial services and transactions to 36 from 80 at present.
Likewise, it seeks to reduce tax rates on interest income from regular savings and short term deposits to 15 percent from 20 percent.
Interest income from assets long-term deposits, foreign currency deposits, and dividends from stocks will also be taxed at 15 percent.
This bill aims to lower taxes on insurance and harmonize the tax rates for life and health insurance, and non-life insurance.
Meanwhile, House Bill 300 seeks to amend a law governing foreign investments in the Philippines.
The FIA got 201 affirmative votes and six negative.
Under the proposal, foreigners may own small and medium-sized enterprises with a minimum paid-up capital of less than $100,000 if it involves advanced technology, or it employs at least 15 direct employees.
Chairman of the House Committee on Trade and Industry Valenzuela City Rep. Wes Gatchalian said the measure is expected to attract more foreign investors.
“Ownership limitations as well as paid-up capital requirements effectively prevent smaller foreign entities with insufficiently large investments to open businesses in the Philippines,” Gatchalian said.