- August 7, 2018
- Posted by: Atty. James Biron
- Categories: Legal News, Tax
Under the two separate tax reform packages, the government is planning to push unified rates levied on capital income and financial instruments and motor vehicle user’s charge.
Proposed by the Department of Finance, the reform in motor vehicle user’s charge, which made part of the 1B in proposed tax package, will hit a single base rate of Php2.50/kilo of gross vehicle weight (GVW) for motor vehicle types whether for private, government use, or for hire; Php300 for vehicles with sidecars and Php240 those without sidecar.
Presently, different rates given for motor vehicle user’s charge depend on the types of vehicle and the GVW.
The collections from motor vehicle user’s charge under the DOF proposal, will go to the general fund in share for public road projects from the national budget annually.
Result of the (TRAIN) Tax Reform for Acceleration and Inclusion Act, package 1B, general tax amnesty is also included, estate tax amnesty, bank secrecy relaxation and automatic exchange of information — removed by the Senate from the version of the first tax reform package passed last year by the Lower House.
The government was planning to implement the much-awaited tax amnesty by April next year to coincide with the deadline of filing income tax returns.
Regarding the tax reform proposed by the DOF for the capital income and financial intermediary tax reform, a single rate of withholding taxes will be adopted, under package four.
A unified rate of 15% for interests, dividends and capital gains will be imposed.
Financial businesses taxes will also be standardized.
Pension and life insurance for preneed will be levied a uniform 2% premium tax.
Image source: RMN.ph
