Lacson Pushes Signing of Law Abolishing Documentary Stamp Tax

The stock market may finally get a much-needed boost in its competitiveness amid the global financial crisis, once a measure abolishing documentary stamp taxes (DST) on secondary stock trades is signed into law.

Sen. Panfilo M. Lacson thus urged President Arroyo to sign soonest the measure, which he said promises to benefit local and foreign investors while improving the country's investment rating.

"The costs of investing in the local stock exchange rank among the highest compared with other markets. The high friction costs for securities trading in the Philippines contribute to the local stock market becoming less liquid and investors are discouraged from placing their money in the stock market," said Lacson, whose Senate committee on ways and means secured the approval of the measure in the Senate last Monday.

The House of Representatives passed its version of the measure last April.

Lacson earlier noted the DST had been a double tax of sorts on players in the stock market. He said the DOF computation showed government stands to lose some P1.3 billion while the PSE computation showed a loss of P1.09 billion if the documentary stamp tax is removed.

"The tax was very cumbersome to compute. Even the Finance Department and Philippine Stock Exchange cannot agree on the amount in terms of foregone revenue. Second, it made the stocks exchange uncompetitive because it was like a second tax on top of the stock transaction tax," he said.

Also, he noted Philippine Stock Exchange executives had noted the economy stands to lose much more if investors were turned off because of the taxation.

Lacson noted that when stock trades were exempted from DST from 2004 to 2009, stock transaction taxes collected by government increased 500 percent due to enhanced trading activity in the stock market. However, the five-year exemption to the DST expired last March 20.

Unless the new measure is signed into law, transactions would be burdened with a 75-centavo tax for every P200 par value worth of shares traded through the secondary market.

The Philippine Stock Exchange imposes one of the highest taxes in the stock market because of the stock transaction tax, which is half of one percent imposed on sellers regardless of whether there is a gain or loss in the transaction.

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Lacson Bill Exempts OFW Remittances from Documentary Stamp Tax

Citing the contributions of overseas Filipino workers to the economy, Sen. Panfilo M. Lacson sought to ease their burden by exempting them from the documentary stamp tax (DST).

Lacson, chairman of the Senate ways and means committee, filed Senate Bill 3255, exempting from the DST money transfers to the Philippines from OFWs.

"In recognition and solicitation of the OFWs' sustained contribution to the economic growth of our country particularly during these difficult times, immediate approval of this bill is earnestly sought," Lacson said.

Besides, he pointed out the share of the DST on OFW remittances is a relatively negligible 3.4 percent of the total DST collection of the Bureau of Internal Revenue.

The revenue loss can be easily recovered through the increased inflow of currency coming from OFW remittances coursed through banks and foreign exchange companies, he added.

Lacson lamented the DST - along with other charges slapped by remittance companies - have prompted some OFWs to send money to their loved ones through the informal sector.

He cited figures from the Bangko Sentral ng Pilipinas indicating charges by remittance firms amount to $15 to 26 per $200, or P720 to P1,248per P9,600 at an exchange rate of P48 to $1.

"No wonder that in 2006, for example, the Bangko Sentral ng Pilipinas calculated that five percent of OFW remittances were coursed through the informal channels," he said.

But under the bill, an OFW can be exempt from paying the DST only if he or she is "duly registered with the Philippine Overseas Employment Agency."

The bill also stipulates that the OFW sending the money transfer must present a government-issued document as evidence of his or her being an OFW.

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Lacson Bill Seeks Allowances for State Auditors

To make sure state auditors will not engage in corruption, a bill has been filed in the Senate seeking to give allowances to the Commission on Audit.

Sen. Panfilo M. Lacson filed Senate Bill 3257 seeking to protect state auditors not only from temptations but also from pressures.

"An effective way to insulate the personnel of the Commission on Audit from unscrupulous individuals is to provide them with monetary incentives commensurate to the mandate of their office. This bill seeks to address this primary concern by granting the employees and officials of the Commission on Audit with special allowances proportionate to their current salary grade. By giving them an additional incentive, the government is thereby recognizing the importance of their profession and the value of their work in safeguarding the general welfare," Lacson said in his bill.

He noted that during budget deliberations, COA reports are a yardstick for Congress in assessing the budget proposals of the different government agencies or bodies. But Lacson said the confidential aspect of their work makes the employees and officials of the Commission on Audit easy targets of political pressure and influence.

"So much so that if not well-compensated, they might give into temptation and abandon their sworn duty to protect the government coffers," he said.

Under the bill, the grant of the said special allowance shall not exceed 100 percent of the basic salary, "proportionate to the salary grades of the officials and employees concerned" as provided in the Salary Standardization Law.

The amount needed for the initial implementation of this Act shall be charged against the current fiscal year’s appropriations under the budget of the Commission. Additional funding sources of the amount necessary to implement the additional compensation in the form of special allowances granted under this Act will include:

* Savings generated by the COA in its operations;
* Fees collected by COA in performing audit and related services to government-owned and controlled corporations (GOCCs) and local government units (LGUs); services rendered to private entities audited in connection with their dealings with the government arising from subsidies, counterpart funding by the government, or where audited records become the basis for government levy and share; and audit and related services arising from contracts with government entities and international organizations;
* Income sourced through the imposition of filing fees on cases filed before the COA in the exercise of its quasi-judicial function;
* Collection through imposition of fines on administrative cases;
* Income collected through the use of COA facilities such as dormitories, gym and training centers; and
* Income sourced through the conduct of seminars and lectures.

"The amounts collected shall be deposited as a Special Trust Fund which shall be administered by the Chairman of the Commission to carry out the provisions of this Act," Lacson said.

In case of salary hikes, special allowances to COA officials and employees shall be converted as part of the basic salary.

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Lacson Pushes Swift Approval of Bill to Professionalize Real Estate Service Practitioners

After nearly 22 years, real estate service practitioners in the Philippines will finally get a chance at seeing their ranks professionalized through the Real Estate Service Act (RESA).

On this note, Sen. Panfilo M. Lacson pushed for the swift approval and signing by President Arroyo into law of the RESA bill following its approval in a bicameral conference last May 5.

“This bill was first filed during the Eighth Congress in the House of Representatives by Rep. Rodolfo Valencia, on October 22, 1987. Real property is seen as a major resource and the greatest financial asset of an individual, of business groups, and of the government. This is why real estate service practitioners play a vital role in developing public and investor confidence in the real property market,” Lacson said.

Following its passage in a bicameral conference, the RESA bill now awaits the approval and signing into law by Mrs. Arroyo.

He said real estate service practitioners help ensure the vibrant movement of capital to support economic activities that will generate more resources for development projects.

Lacson noted that with the value of real property, transactions of this nature are susceptible to manipulation and corruption, “especially if they are in the hands of unqualified persons working under an ineffective regulatory system.”

“This is why the real estate practice ought to be regulated through appropriate licensing and the observance of a code of ethics with a defined disciplinary procedure for the protection of the public,” he said.

Real estate service practitioners include real estate consultants, appraisers, assessors, brokers and salespersons. But the bill will require only real estate consultants, appraisers, assessors and brokers to have licenses and other requirements.

Salespersons are only required to be accredited by the Professional Regulatory Board of Real Estate Service and may undergo certain trainings as may be prescribed by the Board.

Under the bill, the Professional Regulation Commission will take over from the Department of Trade and Industry in administering examinations for real estate service practitioners in the private sector.

“By providing for an effective regulatory structure and licensing requirement, the public is assured that only those that are technically competent and qualified are allowed to practice their profession, or will be appointed in the case of government assessors and appraisers,” Lacson said.

On the other hand, those in government need not worry about losing their positions as the bill allows them to stay in their present positions. However, they must comply with the requirements if they want to be promoted.

The bill also includes a provision requiring a professional indemnity insurance/cash or surety bond for real estate brokers and private appraisers. The bill sets the minimum limit at only P20,000 but the client is free to impose additional requirements depending on the transaction involved.

The provision serves as an additional security for the public when transacting with brokers or appraisers.

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Lacson Bill Creates Tax Academy to Professionalize Tax Collection

Citing the need to train tax collection and administration personnel to help government improve their tax collection efficiency, Sen. Panfilo M. Lacson has filed a bill creating a Philippine Tax Academy.

Lacson filed Senate Bill 3206 creating the institution that will "educate, train, mold and develop" tax collectors and administrators.

"It is therefore urgent that we create a Philippine Tax Academy that will be staffed by a corps of professional lecturers in the fields of taxation, finance and revenue administration, among others, to provide the basic theoretical construct and experimental knowledge to prospective and incumbent revenue collectors and administrators," Lacson, chairman of the Senate Committees on Finance and Ways and Means, said in his bill.

He pointed out there are many institutions or academies that provide specialized training in other aspects of public service. These include the Local Executive Academy, Judicial Academy, Tourism Academy, Philippine Military Academy, and Philippine National Police Academy.

"It is envisioned that in the long run, this will contribute to enhance tax collection efficiency and tax administration in general, thus, raise our tax effort and help arrest our budget deficit," Lacson said of the proposed Philippine Tax Academy.

He also noted that the increasing needs of a growing population will require a substantial rise in tax collection. He lamented the government's tax effort in relation to Gross Domestic Product had been declining from 16.3 percent in 1995 to as low as 12.4 percent in 2004, and 15.1 percent in 2008.

Under the bill, the Philippine Tax Academy will be a component unit under the supervision of the Department of Finance.

The Academy will implement a curriculum for tax collectors and administrators, and shall conduct seminars, workshops and training programs to enhance their "skills and knowledge, moral fitness, efficiency and capability."

It will have a board of trustees appointed by the President, from nominees of the DOF. The board will have members from the DOF, Bureau of Internal Revenue, Bureau of Customs, Bureau of Local Government Finance, and three representatives from the academe.

Representatives from the academe will nominees of State Universities or accredited private institutions. They must have at least five years' teaching experience in a reputable school in taxation, public finance and public administration.

The board member representing the DOF shall be ex-officio chairperson of the Board, while the board member representing the BIR and BOC will be ex-officio vice chairpersons.

Members of the board will serve for a minimum of three years and will have honoraria instead of a fixed compensation.

The Academy may enter into consortium agreements with the University of the Philippines and training institutions for curriculum development and continuing educations in tax collection, auditing and administration.

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