For so many years, professionals working in the capital markets here in the Philippines have been complaining about the high costs of financial transactions due to taxes. Isn’t it  almost funny when you look at the running balance on your savings accounts? Seeing the measly interest on your deposits deducted by a 20% tax on interest income. What more when you’re talking of taxes on dividends, sales of shares of stocks, capital gains on sale of real estate! Whew.

Now, here’s the PERA Bill and it seems to be the solution everybody has been waiting for. Or is it?

Based on the March 4 version of the PERA Bill rules, your tax breaks under this new law are three-fold. There’s the 5% tax credit on your annual contribution, maximum of P100,000 for local residents and P200,000 if you’re working or living abroad. If you invest more than the maximum amount per year, then you get the tax break for the first P100,000 or P200,000 you invested, or you have to choose and inform your administrator which of your investments should enjoy the tax credit.
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