MANILA -- Finance Secretary Ralph Recto is looking to adjust the tax rates on passive income, which is Package 4 of the Comprehensive Tax Reform Program.

The DOF had earlier said that it is looking at pegging the tax rate on all passive income at 15 percent to simplify administration and encourage compliance.

Under the proposed Passive Income and Financial Intermediary Taxation Act (PIFITA) the tax rate on interest income will be gradually reduced from 20 percent to 19 percent in 2024, 18 percent in 2025, 17 percent in 2026, 16 percent in 2027, and 15 percent in 2028.

The DOF is also proposing harmonizing the tax on dividends with the tax on interest income by increasing the tax rate on dividend income from 10 percent to 15 percent.

In a statement, Recto noted that this would bring in an estimated additional P12.2 billion in revenues from 2024 to 2028.

• DOF wants excise tax on pickup trucks

The other priority measures of the DOF are the Value-added Tax (VAT) on digital service providers, the imposition of excise tax on single-use plastics, the rationalization of the mining fiscal regime, and the reform on the motor vehicle users’ charge.

Recto had earlier said there will be no new taxes this year.

• No new taxes this year: Finance chief Recto

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