The Philippine American Chamber of Commerce (PACC) to Hold Forum on Philippine Tax Reform and Developments
By: Attorney Betheena Dizon
PACC, Special Projects Officer
Tax reform has been one of the Duterte administration’s 10-point agenda launched upon the Philippine President’s assumption of power in 2016. Indeed, the Department of Finance together with Congress partnered to overhaul the Philippine Tax Code, where the last substantial amendment was made way back in 1997. The tax authorities divided the tax reform program in several packages with focus on the following: reduction of personal income tax rates, decrease in corporate income tax rate with rationalization of fiscal incentives, harmonizing of passive income withholding tax rates, and tax amnesty.
Package 1 or better known as the Tax Reform for Acceleration and Inclusion (TRAIN) Law took effect on January 1, 2018. The TRAIN Law reduced personal income tax rates, standardized estate and donor’s tax into a single rate, indexed the excise tax on fuel to inflation, and introduced a new set of excise taxes. On the other hand, Packages 2 and 4, which deal with corporate income taxes and passive income withholding tax rates, respectively, are now pending in Senate for deliberation after these were passed by the House of Representatives in late 2018.
But of particular development as of the moment is the general and estate tax amnesty bill which was passed by Congress also in late 2018 and is now awaiting the President’s signature for approval. The tax amnesty bill provides a good opportunity for all taxpayers with unpaid taxes to settle their obligations with the Government and start a new clean slate tax-wise by paying an amnesty tax to be determined according to their net worth or net assets.
Interestingly, the tax amnesty also covers estate tax amnesty. Congress has recognized that there are substantial assets, specifically, significant tracts of land that remain idle and unutilized due to unpaid estate taxes. In order to free up these idle assets for economic development, the estate tax amnesty proposal offers the settlement of unpaid estate taxes by paying amnesty tax according to the mechanics identified by the Government.
To update the Filipino American businesses and the broader community of these initiatives in the Philippines, the Philippine American Chamber of Commerce (PACC) in New York will be holding a Breakfast Conversation entitledPH 102: From TRAIN Law to Tax Amnesty Law – Updates on Philippine Tax Reforms, on February 7, 2018. Individuals and corporations interested to learn more about this issue are encouraged to attend. For details, please email PhilAmChamberNY@gmail.com or visit www.philamchamberny.org