President Duterteâs chief economic manager on Friday said he remained hopeful that Congress will pass a couple of measures as part of the administrationâs comprehensive tax reform program, following the progress of bills aimed at further opening the economy to foreign participation.
âThe approval on third reading of the Department of Finance (DOF)-supported amendment proposals to the Public Service Act, the Foreign Investments Act and the Retail Trade Liberalization Act by both houses of Congress in 2021 bode well for the approval of the remaining tax reform packages,â Finance Secretary Carlos Dominguez III said in a statement.
President Duterte already signed the amendments to the Retail Trade Liberalization Law as Republic Act No. 11595, now allowing a lower minimum paid-up capital of P25 million for foreign retailers, from P125 million previously.
Dominguez said the DOF was optimistic that the legislature can still approve real property valuation reform and the passive income and financial intermediary taxation act (Pifita), both of which were already passed by the Lower House but remained pending at the committee level in the Senate.
The third and final session of the current 18th Congress will resume on Jan. 17 and then go on recess on Feb. 4, ahead of the May 9 national election. Postelections, Congress will still have sessions on May 23 to June 3, before adjourning and paving the way to the next set of elected legislators in July.
Updated property taxes
Dominguez reiterated that real property valuation reform âaims to develop an equitable and efficient system while broadening the tax base used for property-related taxes of the national and local governments.â
âReforming the property valuation system to make it on par with global standards and shielding it from political influence will help local government units raise more revenues without increasing the existing tax rates or imposing new taxes,â the Finance chief said.
As for Pifita, Dominguez said it âwill reduce the number of differing tax rates from 80 to 36 and harmonize the tax rates on interest, dividends and capital gains and the business taxes imposed on financial intermediaries.â
Documentary stamp tax
Pifita will also do away with the documentary stamp tax currently slapped on nonmonetary transactions, he added.
Once Pifita gets passed into law, Dominguez said âthe Philippines can be more competitive in attracting capital and investments that are urgently needed to finance large-scale infrastructure, including the âBuild, Build, Buildâ program, create more and better jobs, and boost economic growth.â
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