Gatchalian seeks to bolster capital and debt market development; encourages more Filipinos to save and invest

Senator Win Gatchalian is seeking to encourage more Filipinos to invest in the local capital and debt market by simplifying and harmonizing taxes on passive income and financial intermediary taxes.

Gatchalian, who chairs the Senate Committee on Ways and Means, said that Senate Bill 1347 or the Passive Income and Financial Intermediary Taxation Act (PIFITA) will essentially cut the cost of raising capital and debt by reducing the number of tax bases and rates applicable to passive income, financial intermediaries, and financial transactions.

The goal of the measure is to level the field among players with better pricing information by removing tax-induced distortions and is expected to discourage arbitrage opportunities.

"There is a need to rationalize the taxation of the financial sector to provide better pricing information to market actors and facilitate the long-term growth and development of our economy," Gatchalian said.

If enacted into law, the measure will reduce the number of final withholding tax rates, unify tax rates on passive income, harmonize business taxes on financial intermediaries, and rationalize documentary stamp tax.

"We earnestly hope that this measure will enhance capital and debt market development in the country and encourage more Filipinos to invest in our formal financial markets," he emphasized.

He noted that the Philippines scored only 2.25 out of a possible score of 5 based on the 2017 Mckinsey Asian Capital Markets Development Index. Based on the same study, the cost of raising equity in the country is more than 14%, caused mainly by friction costs, which are the direct or indirect costs associated with the execution of a financial transaction, including taxes, commissions, and other fees.

"Malaki ang papel ng ating financial sector sa pangmatagalang paglago ng pambansang ekonomiya. Ang panukalang batas na ito ay isang pagkilala sa pangangailangan ng isang mas simple at patas na pagbubuwis sa mga transaksyon na may kinalaman sa ating capital at debt markets," Gatchalian ended.

Gatchalian nais palakasin ang capital at debt market; hikayatin ang mas maraming Pilipino na mag-ipon at mamuhunan

Hangad ni Senador Win Gatchalian na hikayatin ang mas maraming Pilipino na mamuhunan sa lokal na capital at debt market sa pamamagitan ng pagpapasimple ng pagbubuwis sa passive income at financial intermediary taxes.

Sinabi ni Gatchalian, na namumuno sa Senate Committee on Ways and Means, na ang Senate Bill 1347 o ang Passive Income and Financial Intermediary Taxation Act (PIFITA) ay makakabawas sa halaga ng pagpapalaki ng kapital at utang sa pamamagitan ng pagbabawas ng bilang ng tax bases at rate ng buwis na angkop sa passive income, financial intermediaries, at financial transactions.

Ang layunin ng panukalang batas ay gawing patas sa lahat ng mga manlalaro sa industriya ang isang mas maiging pricing information sa pamamagitan ng pag-alis ng mga tax-induced distortions.

"Kailangang bigyang-katwiran ang pagbubuwis sa sektor ng pananalapi o financial sector upang magbigay ng mas mahusay na pricing information sa merkado tungo sa pangmatagalang paglago at pag-unlad ng ating ekonomiya," sabi ni Gatchalian.

Kapag naisabatas na, babawasan nito ang bilang ng final withholding tax rates, pag-iisahin ang tax rates sa passive income, iha-harmonize ang business taxes sa financial intermediaries, at ira-rationalize ang documentary stamp tax.

"Umaasa tayo na ang panukalang ito ay magpapahusay sa capital at debt market at maghihikayat sa mas maraming Pilipino na mamuhunan sa financial market," diin niya.

Sinabi ni Gatchalian na ang Pilipinas ay nakakuha lamang ng 2.25 mula sa posibleng puntos na 5 batay sa 2017 Mckinsey Asian Capital Markets Development Index. Batay sa parehong pag-aaral, ang halaga ng pagtataas ng equity sa bansa ay higit sa 14%, kadalasan dahil sa tinatawag na friction cost, na siyang direct o indirect costs na nauugnay sa pagpapatupad ng isang financial transaction, kabilang ang mga buwis, komisyon, at iba pang bayarin.

"Malaki ang papel ng ating financial sector sa pangmatagalang paglago ng pambansang ekonomiya. Ang panukalang batas na ito ay isang pagkilala sa pangangailangan ng isang mas simple at patas na pagbubuwis sa mga transaksyon na may kinalaman sa ating mga capital at debt markets," pagtatapos ni Gatchalian.