MANILA — Finance officials aim to simplify tax rates on investment products in the Philippines partly to help improve services being offered to the public and address the complex tax rates of financial products.
“We just want to clear the underbrush,” Finance Secretary Carlos Dominguez III said.
The Finance chief said package four of the tax reform program, which Department of Finance (DOF) officials target to submit to Congress by the middle of this year, will correct years of attrition and simplify the rates.
He said a peso-denominated investment product that has a tenor of less than five years is being slapped a 20 percent withholding tax for interest it earned but the rate is zero for those that have tenors of more than five years.
He said a dollar-denominated investment product has a 7.5 percent withholding tax regardless of tenor.
‘We want to simplify it so that it becomes easier to file, administer,” he said.
Dominguez said package four of the tax reform will be revenue neutral.
He is optimistic that the financial industry will welcome the proposed reform in the tax rates of the products they offer.
Finance Undersecretary Antonette Tionko said the proposed reform on financial products’ tax rates will help the public determine which products are best for them.
“What we want is for the rates to be similarly close to each other so that the providers will improve their service. So you know it’s not one against the other because of tax but because the services are better,” she added. (Joann Villanueva/PNA)
