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Next government to benefit from proposed reforms

Elijah Felice Rosales (The Philippine Star) – July 22, 2021 – 12:00am

Finance Secretary Carlos Dominguez said the passage of the remaining priority measures of the Duterte administration on tax reform and foreign ownership would secure the fiscal stability of the next government.

Dominguez yesterday urged lawmakers to pass the proposed amendments to the Foreign Investments Act (FIA), Public Service Act (PSA) and Retail Trade and Liberalization Act (RTLA) before President Duterte ends his term in 12 months.

“To ensure the long term recovery of our economy and attract more foreign investments, we are urging Congress to pass amendments to the Foreign Investments Act, Public Service Act and Retail Trade and Liberalization Act,” Dominguez said in a speech before the Financial Executives Institute of the Philippines.

In revising the PSA, the government intends to define what are public utilities, which, under the Constitution, are prohibited from being owned by foreigners. As such, industries that fall outside the coverage of the law like telecommunications can soon be operated by foreign investors.

Last year, the House of Representatives approved House Bill 78 limiting the definition of public utilities to the distribution of electricity; transmission of electricity; water pipeline distribution; and sewerage pipeline. The measure is now waiting for its counterpart in the Senate.

The House and the Senate are also scheduled to convene in a bicameral conference committee to discuss the differences in their versions of RTLA amendments.

From a required minimum capital of $7.5 million, or nearly P380 million, the House bill wants to reduce the amount to $200,000, or about P10 million, for foreign retailers, while the Senate measure seeks to set it at P50 million.

Likewise, proposed changes to the FIA will remove the practice of professions from the negative list with the objective of attracting foreign professionals to locate here to share their knowledge with Filipino workers.

Dominguez also said Congress should pass the remaining two packages of the comprehensive tax reform program: the Real Property Valuation and Assessment Reform Act, and the Passive Income and Financial Intermediaries Taxation Act. He explained legislating these two measures would protect the economy from financial shocks in the future.