Recto to discuss 'tweaked' priority tax measures with senators

By Anna Leah Gonzales

January 28, 2024, 3:43 pm

<p>Finance Secretary Ralph Recto <em>(File photo)</em></p>

Finance Secretary Ralph Recto (File photo)

MANILA – Finance Secretary Ralph Recto said he will soon discuss with members of the Senate the refined priority tax measures of the Department of Finance (DOF).

In an interview on the sidelines of the annual reception for the banking community held in Manila over the weekend, Recto said some of the measures are the Reform on the Motor Vehicle Users’ Charge (MVUC) and the Passive Income and Financial Intermediary Taxation Act (PIFITA).

The two measures were earlier included in the tax reforms pushed by Recto’s predecessor, Benjamin Diokno.

Recto said, however, that some of the proposals need to be "tweaked" to guarantee that these are fairer, easier to collect, and more practical while ensuring that these reforms will not translate to unnecessary burden to Filipino consumers and taxpayers.

The DOF has enhanced its MVUC proposal to consider the impact of the new rates on inflation, particularly in the transportation and logistics sectors.

PIFITA, on the other hand, seeks to harmonize the taxation of passive income and financial intermediaries by reducing and simplifying the complicated tax rates on financial transactions.

It also aims to boost the competitiveness of capital and financial products by aligning the country’s financial tax regime with regional peers.

"Those are the two [measures that were tweaked]. All the others will probably be the same like the mining tax, the [tax on] single use plastics, VAT (value added tax) on digital services, more or less the same," Recto said.

"Eventually maybe a week or two from now, I'll be visiting the Senate to discuss all these measures with them," he added.

MIC meeting

In a separate statement on Sunday, the Finance department said Recto recently presided over the second board meeting of the Maharlika Investment Corporation (MIC) in his capacity as new chairperson to discuss its strategic direction.

Established under Republic Act (RA) 11954, the MIC serves as the sole vehicle responsible for mobilizing and utilizing the Maharlika Investment Fund (MIF) for investments in transactions aimed at generating optimal returns on investments.

The Board approved MIC president and chief executive officer Rafael Jose Consing Jr. to continue discussions with stakeholders regarding potential investments.

During the meeting, Consing reiterated the sectors that will be tapped by the MIF to achieve multigenerational commercial, economic and social development value creation.

These include infrastructure; oil, gas, and power; agroforestry industrial urbanization; mineral processing; tourism; transportation; and aerospace and aviation.

Consing also called for a reorganization of the committee chairpersons to be compliant with Section 26 of RA 11954, which states that an independent director must be the chairperson of the Risk Management Committee, consistent with international best practices.

Independent Director German Lichauco II was nominated as chairperson of the said committee, as well as other committees on good corporate governance.

The Board approved the remittance of funds from the account of the Bureau of the Treasury (BTr) to the MIC.

The BTr shall transfer the contributions to the account of MIC within five business days from receipt of the relevant board resolution.

The Board likewise approved the motion to appoint the Land Bank of the Philippines and Development Bank of the Philippines as depository banks of the MIC.

To ensure that the MIC performs its mandated functions, the Board approved that Consing be authorized to hire personnel as specified under his duties and qualifications in Section 23 of RA 11954. (PNA)