HOUSE PASSES PBBM’S PRIORITY TAX MEASURES

The Philippine Plastics Industry Association Inc. told lawmakers that the proposal will “hurt and eventually kill” the industry.

The group said members of the industry are currently facing the negative impact of local ordinances banning the use of plastic bags in their areas. Several local government units have already issued ordinances against the single-use plastic bags.

For her part, Gabriela Rep. Arlene Brosas voted “no” on the passage of HB 4102 or the act imposing tax on single-use plastic bags.

“While we want to regulate the use of plastic bags for environmental concerns such as reducing pollution, this proposed measure will just be an additional burden to consumers, sellers, and retailers,” she said.

“These taxes should be paid by big companies rather than small retailers, who already make a small profit. Furthermore, this representation believes that in order to solve environmental problems concerning the use of single-use plastic bags, we should have an accessible and affordable alternative for consumers as well as impose stringent regulations for big companies,” Gabriela added.

Digital VAT

MEANWHILE, the HB 4122 seeks to clarify ambiguities in the VAT system that have allowed some digital services and goods sold over the digital space to remain outside the coverage of VAT.

The bill clarifies that digital services, such as digital advertising, subscription-based services, and other online services that can be delivered through the internet as Vat-able.

The measure also aims to strengthen tax compliance through simplified invoicing and registration requirements for Vat-registered nonresident DSPS.

The bill refers the “digital service provider” as a service provider of a digital service or goods to a buyer, through operating an online platform for purposes of buying and selling of goods or services or by making transactions for the provision of digital services on behalf of any person.

Brosas also thumbed down the passage of HB 4122, saying “while it is true that the playing field must be fair especially to local online digital service providers who are already imposing VAT on digital goods and services, we believe levying a new tax in the form of digital tax on other streaming services and digital transactions is not the way forward.”

“Instead [of this digital tax proposal] we should consider the imposition of wealth tax. Around P98 billion will be generated by imposing a wealth tax on the top 20 billionaires,” she added.

Package 4

THE proposed Package 4 of the CTRP seeks to make passive income and financial intermediary taxes simpler and more efficient.

This proposed measure was approved on third and final reading during the 18th Congress.

This measure will redesign the taxation of the financial sector by making it “simpler, fairer, and more efficient,” critical to its role in the long-term growth and development of the economy.

The bill covers the lifting of the exemption on pickup trucks, which Salceda said, “merely corrects an unfair privilege on a vehicle that is mostly for the rich, occupies very large space on the road, and is by all accounts less fuel-efficient than most other vehicles.”

The measure aims to level the playing field by harmonizing tax treatments for certain transactions of financial institutions.

It seeks to simplify the complex structure of the financial sector, ensure neutrality in tax treatment across financial institutions, improve equity among investors and savers, minimize arbitrage opportunities, and promote capital market development and tax competitiveness within the context of financial globalization, increased capital mobility and financial inclusion.

Explaining her “no” vote, Brosas said this Package 4 will only lead to unnecessary and massive revenue losses.

“Mr. Speaker, while we take note of TR AIN 4’s intent to simplify and reduce the overall tax rate and bases on many types of passive income from 74 to 52 supposedly to correct arbitrage and unfairness, this proposed TR AIN Package 4 leads to unnecessary and massive revenue losses at a time when we need to retain the level of tax collections from passive income and financial transactions,” she said.

“The bill rests on a very hypothetical assumption that lowering and simplifying tax rates and bases will deepen the country’s capital market and encourage more Filipinos to put their money in bank deposits, pre-need insurance, stocks and other passive income. In reality, big players in the financial markets will emerge as the biggest winners under this measure, not the small percentage of typical Filipino middle class who have savings or who have insurance,” added Brosas.