MANILA -- A bill seeking to organize and regulate Islamic banks in the country has hurdled committee level at the House of Representatives.
The House committee on ways and means, chaired by Quirino Rep. Dakila Cua, approved an unnumbered substitute bill that seeks to expand the Islamic banking system in the Philippines.
The House panel specifically deliberated on the bill's feature that mandates a neutral tax treatment between Islamic banking transactions and conventional banking transactions.
AMIN Partylist Rep. Amihilda Sangcopan, principal author of the substitute bill, said Islamic banking is part of the country's commitment to the Association of Southeast Asian Nations (ASEAN) economic blueprint.
Only the Philippines and Laos do not have Islamic banking compared to other ASEAN member states.
“The nature of Islamic banking transactions is that if you don’t apply tax neutrality, it would entail the client double taxation,” said Sangcopan.
The bill mandates the Bureau of Internal Revenue (BIR) to implement policies and guidelines to make tax neutrality conducive to the growth of Islamic banking and finance.
The bill also grants BIR the power to modify applicable taxes on Islamic banking transactions. (PNA)