The Department of Finance (DOF) unveiled a refined proposal on Thursday to simplify the tax structure for passive income and certain financial instruments.
The plan, aimed at boosting the country’s financial market, outlines a phased approach with key changes including a unified 20% interest income tax rate, delayed royalty tax reduction, gradual dividend tax cut, reduction of stock transaction tax from 0.5% to 0.1% by 2028, and the removal of taxes on financial transactions and bills of exchange proposed by 2028.
Tax rates on bank checks, drafts, certificates of deposit not bearing interest, and other instruments will remain unchanged.
From the current 12 percent value added tax imposition on HMO, pre-need and pension plans, a 2-percent premium tax will be imposed to harmonize the instruments with the tax on life and health insurance.
Rates on policies of insurance upon property, fidelity bonds and other insurance policies, meanwhile, will gradually be decreased annually by 1 percent, from 12.5 percent to 7.5 percent in 2028.
Taxes on Philippine Charity Sweepstakes Office (PCSO) tickets, prizes and other winnings will have no changes while taxes on mortgages, pledges and deeds of trust will stay as is until 2027, after which they will be lowered to 0.3 percent in 2028.
The DOF said the refined proposal was presented by Undersecretary Karlo Adriano to finance sector stakeholders in a briefing on March 1, 2024. (PNA)
https://bilyonaryo.com/2024/03/15/marcos-admin-mulls-tax-overhaul-for-passive-income-financial-instruments/money/
