THE passive income package of the Comprehensive Tax Reform Program (CTRP) was introduced in the House of Representatives on Wednesday, with the senior legislator sponsoring the measure into plenary touting the need to complete the overhaul of the tax system started by the previous administration.
Albay Rep. Jose Ma. Clemente S. Salceda, chairman of the ways and means committee, said in his sponsorship speech: “If we are able to enact this package as proposed, we will complete the Comprehensive Tax Reform (CTRP), one of the largest tax reform programs of any country in the world.”
The package proposes to simplify the methods of taxing passive income by reducing the rates applicable to such income and harmonizing most of the rates at 15%. The package also proposes a gross receipts tax on bank, quasi-bank and other non-bank financial intermediary income of 5%, a premium tax of 2%, and a stock transaction tax of 0.1%.
It also rationalizes the documentary stamp tax (DST) regime by imposing a single rate on the original issue of shares and units of participation for collective investment schemes.
The reform package will also remove the DST on documents required for visas, job applications, and other routine transactions, repeal the exemption of foreign currency deposits from interest income tax, and remove the excise tax exemption of pick up-trucks.
“All in all, this measure will gain P30 billion for the government in 2023,” Mr. Salceda said.
“The program, I am proud to say, is now a case study for model reforms and best practices in Harvard University,” he added.
The CTRP was declared a priority measure by President Ferdinand R. Marcos, Jr. in his State of the Nation Address on July 25.
Nueva Ecija Rep. Mikaela Angela B. Suansing said that the House committee believes that the tax reform can attract investment and lead to the creation of better jobs, improving government revenue streams over the long term.
She added that approval of the measure will promote the development of the capital markets and upgrade tax administration. — Kyanna Angela Bulan