A bill that seeks to allow foreign professionals to practice in the Philippines and reduce the required number of direct local hires by foreign investors was approved on third and final reading by the House of Representatives on September 9, 2019.
The Lower Chamber also approved a bill that seeks to scrap taxes on initial public offerings (IPOs) and simplify taxation of passive income, financial services, and transactions.
House Bill No. 300, which will amend the Foreign Investments Act or Republic Act was approved after a vote of 201 affirmative, 6 negative and 7 abstentions.
House Bill No. 304, or the Passive Income and Financial Intermediary Taxation Act (PIFITA), was passed after a roll call vote that yielded 186 affirmative votes, 6 negative and 2 abstentions.
The foreign investments bill seeks to amend Republic Act 7042, which lists “practice of professions” among the activities that are off limits to foreign investors.
Under House Bill No. 300, foreign professionals will be allowed to practice in the Philippines.
"By allowing foreign professionals to practice in the Philippines, they would be able to bring in technology and know-how from abroad, and help create jobs for locals by attracting businesses that require highly skilled professionals in the country," Representative Victor Yap, proponent of the bill, said in his explanatory note.
The bill also seeks to reduce to 15 from the current 50 the number of direct local hires that a foreign investor is required to employ.
Under RA 7042, a foreign investor may set up a business with a minimum paid-in capital of US$100,000 and at least 50 local employees.
The PIFITA bill, meanwhile, is Package 4 of the Comprehensive Tax Reform Program. It seeks to amend several provisions of RA 8424.
Under the bill, a unitary rate of 15% would be imposed on interest income of individuals and corporations as well as on capital gains on unlisted stocks and debt securities.
The bill also proposes to remove the tax on IPOs of shares of stock and reduces gradually the stock transaction tax on listed stock to 0.1 percent from the current 0.6 percent.
This measure aims to simplify the taxation of passive income, financial services, and transactions as well as harmonize the tax rates for life and health insurance and non-life insurance. (Ventures Cebu)