PERA Bill Gains Progress in Senate

Article excerpt


Related legislative bills which aim to create the Personal Equity and Retirement account have been consolidated into a substitute bill which is ready for sponsorship and plenary deliberations and debate in the Senate.

The PERA bills, envisioned to help ordinary Filipinos save more money for their old age, have hurdled deliberations at the Senate Committee on Banks, Financial Institutions and Currencies.

PSE president Francis Lim, who helped crafted the bill, immediately expressed gratitude to Senator Edgardo Angara's committee as "this is a step in the right direction towards developing the local capital market."

"I hope the House will come out with the companion bill so that this long-awaited legislation will become a reality soon," Lim added.

Under the endorsed PERA Law, workers will enjoy the following tax benefits:

--a tax credit, equivalent to five percent of the members' PERA contributions;

--a tax exemption for the income of their PERA contribution; and

--a tax exemption for the distribution of their PERA contributions.

The enjoyment of the tax perks is subject to certain conditions.

For instance, the bill states that, while a PERA contributor shall get a tax credit, no tax refund shall be given. A tax credit can be deducted from a tax that is due to be paid by a taxpayer to the Bureau of Internal Revenue (BIR).

Although all income to be derived by the PERA is tax exempt, the proposed bill also states that the tax exemption can be enjoyed, only if the PERA account is invested solely in "PERA Investment Products" in the Philippines. …