Tax reform packages and assistance to pandemic-affected MSMEs lead top priority bills for passage in 2021

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Metro Manila (CNN Philippines, March 3) – The last two packages of the Comprehensive Tax Reform Program (CTRP) and a measure that will aid pandemic-stricken small businesses are among the top legislative agenda of the Legislative-Executive Development Advisory Council (LEDAC) this year.

LEDAC determines and recommends to the President the top socio-economic development goals affecting national development.

Acting Socioeconomic Planning Secretary and LEDAC Secretariat Head Karl Kendrick Chua said these pending bills in Congress are important for the country's economic recovery amid the COVID-19 pandemic.

"These bills are crucial in ensuring the country's economic recovery and in regaining our development trajectory that was held back by the COVID-19 pandemic. We will continue working with Congress to move the legislative agenda forward and enact these priority legislations within 2021," said Chua.

Executive Secretary Salvador Medialdea said the passage of these bills will help create a stable economic environment and strengthen the national healthcare and fiscal systems against public emergencies.

"The pandemic has pulled back our human development gains, but at the same time, it has given us the opportunity to assess how we can bounce back stronger and protect our people from future shocks. The measures in the CLA (Common Legislative Agenda) will lay the groundwork to ensure that Filipinos will not face the same problems of hunger, job loss, and sickness in the future," Medialdea said.

The proposed Government Financial Institutions Unified Initiatives to Distressed Enterprises for Economic Recovery or GUIDE Act, recently approved by the House of Representatives in final reading last month, is part of the 12 priority measures that LEDAC hopes to be passed by June this year. The GUIDE Bill will help micro, small, and medium enterprises (MSMEs) cope with the pandemic by availing of loan assistance programs from the Land Bank of the Philippines, Development Bank of the Philippines, or Philippine Guaranty Corporation.

RELATED: House approves bill providing financial aid to MSMEs amid COVID-19 pandemic

The last two CTRP packages identified by LEDAC that must be passed by June are Package 3 or the Valuation Reform Act and Package 4 or the Passive Income and Financial Intermediary Taxation Act (PIFITA), both have hurdled the House of Representatives and are still being deliberated in the Senate.

The proposed Valuation Reform Act, which seeks to establish a single valuation base for property-related taxes of the national and local governments, will help increase government revenues without hiking the existing tax rates or devising new tax impositions.

On the other hand, PIFITA complements the Tax Reform for Acceleration and Inclusion or TRAIN Act where it harmonizes and lowers tax rates on passive income, which includes stock dividends, bank deposits, and other forms of income in the capital market, from 20% to 15%. The bill also seeks to impose 5% single gross receipt tax rate on banks, quasi banks, and certain non-bank financial intermediaries and 2% premium tax on health maintenance organizations, pension, and pre-need insurance products.

The other priority measures targeted to be passed by June are amendments to the Public Service Act, Retail Trade Liberalization Act, and Foreign Investments Act. Other proposed laws in the list are Rural Agricultural and Fisheries Development Financing System Act, Medical Reserve Corps Act, Disease Prevention and Control Authority Act, Imposing Amusement Tax on Digital Platform and Offshore Betting Stations of Licensed Cockpits, Establishing the Tax Regime of Philippine Offshore Gaming Operators, and Strengthening Local Government Participation in National Development by Increasing the Share of Local Government Units in the National Internal Revenue Taxes.

The LEDAC also listed 13 bills in its Common Legislative Agenda which it expects to be passed by December 2021. The list includes the Department of Overseas Filipinos Act, Department of Disaster Resilience Act, Boracay Island Development Authority Act, Unified System of Separation, Retirement and Pension of the Military and Uniformed Personnel Act, National Land Use and Management Act, and Internet Transactions Act.

Among the other target legislative measures due for passage in December 2021 are the Magna Carta for Barangay Health Workers Act, National Housing Development Act, Expanded Solo Parents Welfare Act, Modernizing the Bureau of Fire Protection Act, Modernizing the Bureau of Immigration Act, Amending/Repealing the Continuing Professional Development Act of 2016, and Reviving the Death Penalty by Lethal Injection for Crimes specified under the Comprehensive Dangerous Drugs Act of 2002.

LEDAC added there are five priority measures that have secured the nod of both houses of Congress. These are the General Appropriations Act for 2021, Financial Institutions Strategic Transfer or FIST Act, Amendments to the Anti-Money Laundering Act, Coconut Farmers' and Industry Trust Fund Act, and Corporate Recovery and Tax Incentives for Enterprises or CREATE Act.

The Philippine economy plunged to -9.5% in 2020, the country's sharpest economic drop since the Philippine Statistics Authority started collecting data on annual growth rates in 1946, due to crippled consumer spending and business activities brought by the COVID-19 pandemic.