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A Review of Economic and Tax Reforms

By Euney Marie Mata-Perez on January 6, 2022

HAPPY New Year! We have hurdled 2021, which was not easy and full of challenges. Nonetheless, we continue to be grateful to have survived the year.

We all are hoping that 2022 will be much better. However, with the national elections near, there could be challenges in passing a number of key economic and tax measures.

In March last year, the most important tax legislation passed was the “Corporate Recovery and Tax Incentives for Enterprises” (Create) law, or Republic Act (RA) 11534. We also saw the passage of RA 11569 amending RA 11213 or the “Tax Amnesty Act” that extended the availment of the estate tax amnesty to June 14, 2023. We should have also seen the passage or lapsing into law of the following:

  • Senate Bill (SB) 2407, which seeks to clarify that all private schools, both nonprofit and for profit, are entitled to the 1-percent preferential tax rate under the Create Act. It was enrolled and sent to the Office of the President last Nov. 11, 2021 and should have lapsed into law on Dec. 11, 2021.
  • SB 1840 — the proposed amendments to the Retail Trade Liberalization Act — that was approved by Congress last Sept. 21, 2021 and enrolled and transmitted to the Office of the President on Nov. 10, 2021. It should have lapsed into law on Dec. 10, 2021.

Pending economic bills

We still look forward to the passage of amendments to the “Foreign Investment Act” (RA 7402 or the FIA, as amended by RA 8179) and the “Public Service Act” (Commonwealth Act 146 or the PSA).

Last Dec. 9, 2021, the Senate and the House of Representatives approved and ratified the bicameral conference committee report on proposed amendments to the FIA, harmonizing SB 1156 and House Bill (HB) 300. The harmonized bill is now for enrollment and signature of the President.

SB 2094, which seeks to amend the PSA, was already approved on third reading at the Senate last Dec. 16, 2021. It will have to go through a bicameral committee, which we understand has already been constituted. This bill is very critical for the liberalization of industries such as telecommunications, transportation and airlines.

Pending tax measures

Still pending are several significant tax measures, the most important of which is HB 304 or the proposed Passive Income and Financial Intermediary Act (Pifita) and Package 4 of the Comprehensive Tax Reform Program (CTRP). Pifita was intended to complement the Tax Reform for Acceleration and Inclusion Act and Create laws by making passive income and financial intermediary taxes simpler, fairer, more efficient and more competitive. It seeks to simplify the taxation of passive income, financial services and transactions by reducing the number of tax rates from 80 to 36, harmonizing tax rates on interest, dividends and capital gains, and the business taxes imposed on financial intermediaries, removing the documentary stamp tax imposed on nonmonetary transactions and removing the initial public offering tax that is detrimental to capital market development.

Also still pending in the tax arena are:

  • HB 8942 or the proposed Ease of Paying Taxes Act, which the House approved on the third reading last Sept. 15, 2021 and was transmitted to the Senate the next day. This bill aims to modernize tax administration and improve tax compliance by simplifying compliance procedures and strengthening the taxpayer’s bill of rights.
  • HB 4664, the proposed Real Property Valuation and Assessment Reform Act or package 3 of the CTRP, that seeks to promote the development of a just, equitable and efficient real property valuation system primarily through the introduction of a single and uniform valuation based on international valuation practices and is true-marker based for real properties.
  • HB 8618 or Package 2+ on mining tax reform, which puts in a single fiscal regime all mineral agreements to promote fairness.
  • HB 7425, which seeks to amend the Tax Code to impose the 12-percent value-added tax on the sale by nonresidents of digital services and goods to Philippine residents. The bill was approved by the House on the third reading last Sept. 21, 2021.

Limited time

The 18th Congress has a very limited time prior to the end of its final session. It is to resume work on January 17 and will go on recess starting February 5 for the election campaign period. It will resume session on May 23 up to June 3.

It requires focus, determination and political will to pass the above key measures before June 30, 2022. We thus urge legislators and the Office of the President to make a priority and mark as urgent these important key tax and economic measures that our country needs for progress and recovery.

Euney Marie J. Mata-Perez is a CPA-lawyer and the managing partner of Mata-Perez, Tamayo & Francisco (MTF Counsel). She is a corporate, M&A and tax lawyer and has been ranked as one of the top 100 lawyers of the Philippines by the Asia Business Law Journal. This article is for general information only and is not a substitute for professional advice where the facts and circumstances warrant. If you have any question or comment, you can email the author at or visit the MTF website at

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