Finance Undersecretary Karl Kendrick Chua is hopeful for the passage of the tax reform bill before the House of Representatives adjourns on June 2, citing the measure’s “substantial progress.”
This after the House’s Ways and Means Committee on Wednesday voted to pass a substitute bill based on the original Comprehensive Tax Reform Program (CTRP) bill submitted by the Department of Finance in September last year.
“We will also convince the plenary to include some original provisions that were removed,” he said.
“The team is now estimating the revenue and deficit impact of the substitute measure,” he said.
The Ways and Means Committee, chaired by Quirino Rep. Dakila Carlo Chua, voted to pass the substitute bill on a 17-4 vote with three abstentions.
Last March 13, the Committee approved “in principle” the proposed tax reform bill and ordered for the creation of a Technical Working Group (TWG), tasked to draft a substitute bill while Congress was on its Lenten Break. The TWG met four times during the six-week recess.
The DOF said among the key features of the substitute bill were lowering of personal income tax (PIT) rates as proposed by the DOF but indexed to cumulative Consumer Price Index (CPI) inflation every three years; a flat rate of six percent for the estate and donor’s taxes; broadening the tax base by removing special laws on value added tax (VAT) exemptions, including those for cooperatives, housing and leasing, but retaining exemptions for seniors and persons with disabilities.
Other features are staggered “3-2-1” excise tax increase for petroleum products from 2018 to 2020 but with no indexation to inflation, and liquefied petroleum gas (LPG) used as feedstock to be exempted from the hike; a five-bracket excise tax structure for automobiles with a two-year phase-in period for the tax increases; and earmarking of 40 percent of the proceeds from the fuel excise tax increase for social protection programs for the first three years of the tax reform measure’s implementation.
Chua said threshold for VAT exemptions was hiked to Php 5 million instead of the earlier proposed Php 3 million threshold. This is being proposed to be indexed to inflation every three years.
DOF wants to remove non-basic sector’s exemption from VAT payment to increase VAT collections by around Php 92 billion annually.
About 59 sectors currently enjoy VAT payment exemptions while 84 others were given exemptions under special laws.
Chua earlier said gains from VAT exemptions removal would finance the additional infrastructure that the economy needed as well as offset the revenues spent to the bottom 50 percent of the economy affected by the proposed increase in VAT as well as the excise tax on fuel.
He said the substitute tax reform bill retained the zero-VAT rate for the renewable energy sector and limited it to direct exporters, upon the creation of the DOF-proposed cash refund system.
The substitute bill also requires self-employed individuals and professionals covered by the Php 5 million VAT threshold to pay an eight percent tax on gross sales or receipts instead of the income and percentage taxes.
Tax payers not covered by the VAT threshold would be taxed according to the 30 percent corporate income tax rate with minimum tax, Chua said, adding that the Optional Standard Deductions (OSD) was retained at 40 percent of gross sales/receipts.
The DOF proposal to implement a 20 percent passive income tax for lottery and sweepstakes winnings instead of a five percent prize fund tax was also adopted under the substitute bill.
The substitute bill exempted pick-up trucks and hybrid cars from the increase in automobile excise tax if these vehicles can run 30 kilometers on a single charge.
South Star Drug Now Accepts GCash in Metro Manila Outlets
South Star Drug, one of the biggest drugstore chains in the Philippines, becomes the first drugstore in Metro Manila that allows customers to purchase medicines and other items using GCash scan to pay mode of payment.
The medicine retailer has over 450 stores nationwide and still growing. The use of GCash in South Star Drug’s Metro Manila outlets is being piloted in six branches – two in Pasig (C. Raymundo cor. F. Legaspi, Dr. Sixto Ave.), two in Makati (Herrera, Guadalupe Unimec), one in Pasay (Balabag Merville), and one in Las Pinas (Philamlife). By end of the year, all South Star Drug outlets are expected to accept GCash scan to pay.
GCash is being operated by Mynt which is owned by Globe Telecom, Ant Financial and Ayala Corp. “Mynt’s partnership with South Star Drug is part of our company’s efforts to make payments more convenient, safer and easier. This brings us another step closer to our goal of making the Philippines a cashless country,” says Anthony Thomas, Chief Executive Officer of Mynt.
Christine Tueres, General Manager of South Star Drug said: “South Star is always working to improve customer experience and find ways of doing things better – that includes giving our customers more payment options. With GCash QR code feature, even without cash or credit card, our customers can make a purchase in any of our stores with just a few taps on their smart phones”.
Using GCash is easy. A customer with an iPhone or an Android smartphone only needs to download or update to the latest version of the GCash App, register for an account, and fund their GCash wallet at any of over 12,000 GCash Partner Outlets nationwide. This includes Robinsons Business Centers. Once done, the customer just has to tap on Scan QR, point a phone’s camera at the partner’s QR code, and key in the amount to be paid.
Manila Water to expand in Thailand
Ayala-led Manila Water Company Inc. is venturing into the water industry of Thailand as part of its ongoing expansion in Southeast Asia.
In a disclosure to the Philippine Stock Exchange, Manila Water said it signed Monday a share purchase agreement with Electricity Generating Public Company Limited (EGCO) to acquire its 18.72-percent equity in Thailand-based Eastern Water Resources Development and Management Public Company Limited.
The company intends to finance the transaction through internally generated funds and bank debt.
It said the closing of the acquisition is still subject to the “fulfillment of certain conditions precedent.”
“We recognize the opportunities this new market presents for us, and we are eager to share the technical expertise and service quality which Manila Water has developed over the last 20 years. From the conglomerate perspective, Ayala sees this development as a strategic entry point into Thailand. With Manila Water leading the way, we hope to leverage our various capabilities to enlarge our footprint in the country,” said Ayala President and Chief Operating Officer and Manila Water Board Chairman Fernando Zobel de Ayala.
East Water’s operations are strategically located along the Eastern Economic Corridor which is targeted to be a leading economic zone in the Southeast Asian region.
East Water, a publicly listed company whose shares are traded in the Stock Exchange of Thailand, is engaged in the provision of raw and tap water supply services in the eastern region of Thailand and home to a number of heavy industries, including automotive, electronics and petrochemicals.
“Our entry into the Thailand water space aligns squarely with our internationalization strategy, with focus in Southeast Asia. East Water presents great potential, as its future growth will mainly come from the Eastern Economic Corridor (EEC), the Thai government’s initiative to further develop the country’s eastern seaboard into a leading economic zone in ASEAN,” said Manila Water President and Chief Executive Officer Ferdz dela Cruz.
Manila Water’s entry into Thailand comes after its foray into bulk water and concession projects in Vietnam.
It has also completed pilot projects in Bandung, Indonesia for a non-revenue water reduction program; and in Yangon, Myanmar for leakage reduction.
MCCI Welcomes New Trustees, Members
The Mandaue Chamber of Commerce and Industry welcomed a new set of trustees in an oath-taking ceremony on Jan. 25 at Maayo Hotel Corp. in Mandaue City. The Chamber also inducted at least 34 new member-companies.
Stanley Go, vice president for sales and marketing of Virginia Food Inc., is the new MCCI president.
“I want to thank the Chamber’s Board of Trustees for their confidence in my ability to navigate and steer MCCI to the direction that it needs to go to contribute significantly to the prosperity of our members who are themselves important engines of economic growth,” said Go.
He added that he will cherish the Chamber’s trust and support in his vision and drive to make the Chamber more relevant to its members.
“As we strengthen the linkages we have established over the years, I hope to increase our membership base from 300 to 500 by the end of 2018,” he said.
Steven Yu, chairman and chief executive officer of Alliance Pacific Resources Corporation, is MCCI vice president for internal affairs. Edgar Allan Po, assistant manager of Winner Plastic Product Corporation, is MCCI vice president for external affairs. Romelinda Cruz-Garces, communication officer of San Miguel Brewery Inc., is the MCCI secretary. Amado Go, president of Cenapro Chemical Corporation, is the MCCI treasurer. Michelle Co-Lin, RBG VisMin-Business Center head of CTBC Bank, is the auditor.
The MCCI’s new Board of Trustees is composed of Glenn Anthony Soco, president and chief operating officer (COO) of GA Satellite Venture; Wilson Ng, president of Ng Khai Development Corporation; Vicky Dy, managing director of Adnetwork Corporation; Alice Uy, proprietor of Jace Handicrafts International; Barbara Gothong-Tan, president and chief executive officer of A.D. Gothong Manufacturing Corp.; Mark Anthony Ynoc, general manager of San Remigio Properties; John King, managing director of King’s Quality Food Inc.; Donato Busa, president of DMC Busa Printers; and Beverly Dayanan, president and COO of Contempo Property.
Mandaue Chamber of Commerce and Industry
Google Announces Intent to Acquire Xively
Today, Google has announced that it has entered into an agreement to acquire Xively, a division of LogMeIn, Inc.
By 2020, it’s estimated that about 20 billion connected things will come online, and analytics and data storage in the cloud are now the cornerstone of any successful IoT solution. This acquisition, subject to closing conditions, will complement Google Cloud’s effort to provide a fully managed IoT service that easily and securely connects, manages, and ingests data from globally dispersed devices. With the addition of Xively’s robust, enterprise-ready IoT platform, we can accelerate our customers’ timeline from IoT vision to product, as they look to build their connected business.
Through this acquisition, Cloud IoT Core will gain deep IoT technology and engineering expertise, including Xively’s advanced device management, messaging, and dashboard capabilities. Our customers will benefit from Xively’s extensive feature set and flexible device management platform, paired with the security and scale of Google Cloud. With Google Cloud’s deep leadership in data analytics and machine learning, our customers will also be uniquely positioned to build turnkey IoT solutions and focus on business value creation.
We look forward to sharing more details after close—stay tuned!
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