By Junex Doronio
MANILA — Reneging on his promise, newly-appointed Finance Secretary Ralph Recto is eyeing to adjust the tax rates on passive income.
Recto had earlier said there would be no new taxes this year but now the Department of Finance (DOF) is proposing harmonizing the tax on dividends with the tax on interest income by increasing the tax rate on dividend income from 10 percent to 15 percent.
In a statement, Recto explained that this would bring in an estimated additional P12.2 billion in revenues from 2024 to 2028.
It was learned that under the proposed Passive Income and Financial Intermediary Taxation Act (PIFITA) the tax rate on interest income will be gradually reduced from 20 percent to 19 percent in 2024, 18 percent in 2025, 17 percent in 2026, 16 percent in 2027, and 15 percent in 2028.
The other priority measures of the DOF under Recto’s leadership are the Value-added Tax (VAT) on digital service providers, the imposition of excise tax on single-use plastics, the rationalization of the mining fiscal regime, and the reform of the motor vehicle users’ charge.
(el Amigo/MNM)
