MANILA – The House of Representatives’ Ways and Means Committee has begun its hearing on the fourth package of the Tax Reform for Acceleration and Inclusion (TRAIN) Law.
The House panel – chaired by Rep. Estrellita Suansing (1st District, Nueva Ecija) – has started tackling two measures (8252 and 8323), which will redesign the financial sector taxation into a simpler, fairer, more efficient, and revenue neutral tax system.
“That’s our plan, to legislate,” said House Speaker Gloria Macapagal Arroyo. “Our agenda is to carry out the agenda of President Duterte so he has his 15 measures that he enumerated in the SONA. We already passed 11 of them.”
The bill underscored the significance of the financial sector in the long-term growth of the national economy. These intend to implement capital income and financial intermediation to encourage savings as well as develop and deepen the capital markets.
“Considering that the financial sector plays a very crucial role in business activities and ultimately economic growth, the Committee will certainly look into these bills extensively to [achieve] the goal of putting our country in a better position to compete in attracting capital investment, which is essential to finance structure, create more and better jobs, and boost the inclusive and sustainable growth of the economy,” said Suansing.
The two bills tackled aimed to address the concerns of the financial sector that it has long been hindered namely complicated tax structure, susceptibility to arbitrage, uneven playing field, inequitable distribution of tax burden, uncompetitive tax system, (f) high administrative and compliance cost, and unsupportive of capital market development.
The two bills have proposed the following reforms reduction in the number of rates of withholding taxes; unification of tax rates for interests, dividends, and capital gains; harmonization of business taxes; removal or minimization of barriers to capital market development; and adoption of regionally competitive tax system.
Finance undersecretary Karl Kendrick Chua, who was present during the hearing, said that TRAIN Package 4 aims at harmonizing rates in the financial and capital tax system, and deepening the capital markets of the country.
“The Package 4 is designed to be broadly revenue neutral so that the main objective is not really to fund the finances of the government but to first fix the tax system so that it can lead into capital market, and indirectly we create future revenues to fund our priority programs,” said Chua.
The House panel then created a technical working group, which shall be tasked to consolidate the remarks of the panel and harmonize the provisions of the measures./PN
