House approves 4th tax reform package bill on 3rd and final reading

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House Bill 8645, also known as the proposed Passive Income and Financial Intermediary Act, seeks to make the tax system for the financial sector fairer, more efficient, and more regionally competitive.

Metro Manila (CNN Philippines, December 4) — The House of Representatives on Monday approved on third and final reading a bill seeking to simplify the tax system for the financial sector — a measure comprising the fourth package of President Rodrigo Duterte's comprehensive tax reform program.

House Bill 8645, also known as the proposed Passive Income and Financial Intermediary Act, seeks to make the tax system for the financial sector fairer, more efficient, and more regionally competitive.

Its key provisions include the yearly reduction in the final tax on stock transactions from 0.6 percent to 0.1 percent.

The bill also harmonizes the tax rates on capital gains on unlisted stocks for both individuals and corporations into a unitary final tax rate of 15 percent.

Should HB 8645 become a law, the premium tax rate on life, health, pension and prre-need insurance will be set at 2 percent while a 5 percent premium tax will be imposed on non-life insurance such as those for properties and crops.

In addition, a unitary tax rate of 0.75 percent will be imposed on collective investment schemes such as mutual funds, unit investment trust funds and unit-liked variables.