PERA law may be implemented this year: PSE
abs-cbnNEWS.com | 11/07/2009 8:45 AM
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MANILA - The Philippine Stock Exchange (PSE) is expecting the Personal Equity and Retirement Account (PERA) Law to be implemented within the year, following the recent approval of its implementing rules and regulations (IRR).
"Given that our regulators already approved the implementing rules for the PERA, we hope that various market players will soon apply as PERA administrators, investment managers, and custodians so that interested individuals may already open PERA accounts as early as now," PSE President and Chief Executive Officer Francis Lim said in a statement.
Last month, officials from the Bangko Sentral ng Pilipinas (BSP), Securities and Exchange Commission (SEC), Bureau of Internal Revenue (BIR), and the Finance Department signed the IRR of the PERA law, which allows the creation of tax-free personal pension schemes similar to the 401K plan in the United States.
The law's revenue regulations, however, have yet to be approved by the BIR and the Finance Department.
"The next challenge is coming up with the revenue regulations that will implement the tax provisions of the law. We hope that the tax regulations will not water down the tax incentives given by the basic law, otherwise the purpose of the law to encourage savings and investments in the local capital markets will be defeated," Lim said.
If fully implemented, the PERA law will cost the government at least P2.3 billion in foregone revenues in the remainder of the year, data from the Finance Department showed.
And for every year starting 2010 that the law is in full swing, the government stands to lose as much as P7 billion.
The government is expecting to lose as much as P65 billion from various "revenue-eroding" measures such as the PERA law. Other measures include the minimum wage law, which exempts minimum wage earners from income taxes.
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