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Three economic reforms

bag House approral

THREE ECONOMIC REFORMS

gained ground in the House of

Representatives on Monday eve-

ning, with the measure removing

restrictions on foreigners from

practicing their professions in the Philippines and another sirnpli{y-

ing taxes on financiil instrumeits

both bagging final approval.

Meanwhile, the tax reform

which slashes corporate ilcome tax rates but also removes re-

dundant perks was approved on

second reading.

FoRElGll PRoFESSIoNAI' Sl,lEs

With 201 afirmative votes, six

negative votes and seven absten-

House Bi No. 300, which

proposes to amend Republic Act

No. 7042, or the "Foreign Invest-

ments Act (FIA) of 1991", was passed by the chamber on third and final reading.

The measure - authored prin-

tions,

cipally by Tarlac 2"d District Rep.

Victor A. Yap - \r'ill allow foreign- ers to practice their piofessions in the Philippines in order to fa-

cilitate transfer ofknowledge and technologies to locals. It "aims to

exclude the 'practice of profes-

sions' from the coverage of the

Foreign Investments Act so as to

attract foreign professionals to

practice in the Philippines where- in they would be able to bring in technology and knorv-how from

abroad and attract foreign direct investments, and help generate more employment opportunities in the country." Thebill also reduces to 15 from 50 cu[ently the minimum num- ber of direct local hires required

of foreign investors setting up

small- and medium-sized enter-

prises (SMEs) with minimum

paid-in capital of $10o,00o.

Counteryart bills - Senate Bill

No.4I8 and 419 - havebeen filed

anew in'the Senate by Selators

Francis N. Pangiliqan and Sher-

win T. Gatchalian, respectively.

FOURTH TAX REFORI'I

With 186 affirmative votes, six

negatives and two abstentions, HB 304, or the proposed Passive

Income and Financial Interme-

diary Tax Act (PIFITA), which

makes up the fourth package of the government's comprehensive

Reforms, S1/3

tax reform program (CTRP) also bagged the chamber's final ap-

proval.

The bill, introduced by Al-

bay 2'd district Rep, Jose Ma. S. Salceda, proposes a unified 15% income tax rate on interest, divi-

dend, ard capital gains from the

current range ofzero to 3070. Package 4 of the CTRP also

proposes the reduction of the

stock transaction tax from 0.6% to 0.170 and imposition of a 0.170

transactiod tax on debt instru- ments listed and traded on the Philippine Dealing Exchange. It will also remove the initial public

offer tax. The measure will also impose a

,uniform five percent gross receipt

tax on banks and other financigl intermediaries, ard will reduce the tzz iatue added tax (VAT) to a two percent premium tax on health insurance organizations,

pension and pre-rieed insurance.

Amendments to the original

version of thebill so far include:

. dividends received by a do- mestic corporation from another

domestic firm will not be subject to tax;

. exemption from document

stamp tax of non-monetary docu- ments like diplomas, transcripts of records and other school certi- fications; oath of office for bann-

gays; good standing certification

from the Professional Regulation

Commission, affidavits, certifi-

cates of no mardage record, bap-

tismal certificates and marriage

license certifrcates.

CoRPORATE ll{COl,lE TAX

HB 4l5Z or the proposed "Corpo-

rate Incohe Tax and Incentives Reform Acf' CITIRA (in tlle past

Congress, called the "Tax Reform

for Attracting Better and High- quality Oppodunities" or TRA-

BAHO), was approved on second reading,

The bill seeks to cut the cur- rent 30% corporate indome tax rate - described as the highest

among major Asian markets -

by one percentage points every othet year to 2OEo in 2029.

Amendments to the original

version so far include a provisibn- that businesses in ereas beside

Metro Manila will have four

years of income tax holiday and

three years of reduced corporate

income tax, while those farther

away will benefit from six years of

income tax holiday and four years

of reduced corporate income tax.

It also gives fiscal incentives only to exporters and industries

listed iu the Strategic Invest-

ments Priority Plan, taking into

account amount of investments,

employment generation, use of new technologies, adequate en- vironmental protection systems, promotion of competitiveness,

and added SME output, among

others. - v,.4,. C. trbireraa

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