• INTERVENTION & REGULATION
PHILIPPINES
Hector is a Philippine CPA with more than twelve years of overall experience in external audit, internal audit, fraud audit, tax compliance audit, due diligence & valuation, business process review, special engagements and accounting functions. He has vast experience in local taxation and general knowledge in Australian taxation. His professional career started when he engaged himself from one of the big four auditing firms in the Philippines and has extensive knowledge in financial audits of companies registered in economic zone areas (PEZA & BOI) that are engaged in manufacturing, sub-assembly, trading, information technology, manpower placement, and non-profit activities. He was seconded to UHY Malaysia where he was tasked to co-lead
Is high taxation here to stay?
expansion of value-added tax (VAT) exemptions. These provisions aim to make the business environment more favorable and competitive, boosting economic growth. • Passive Income and Financial Intermediary Taxation Act (PIFITA) aimed at simplifying and rationalising the taxation of passive income and financial transactions. Q2
geopolitical risks, policy shifts, tax reforms, market volatility, globalisation, technological advancements, demographic shifts, and ESG factors all contribute to the evolving landscape of wealth management. The Philippines may have underdelivered on its economic and market potential in the past. But, driven by a growing sense of alignment between the private sector, regulators, and the government in promoting financial sectors, there is still significant positivity. It is particularly evident as the mass affluent class rises and the government aims to retain more private wealth onshore. With positive GDP growth and favorable demographics, the Philippines is confident about it. They encourage private clients to diversify their investments, moving away from passive deposits and increasing their exposure to financial market investments. Local and international players must position themselves in this high-potential market in the current competitive environment and understand the key drivers as the population grows and the economy and private wealth creation expand, even amidst global uncertainties. The regulatory environment in the Philippines is improving, with oversight from three major regulators for wealth management entities: the Central Bank of the Philippines, the Securities and Exchange Commission, and the Insurance Commission. Despite challenges such as increased competition, regulatory hurdles, cost pressures, and changing client expectations, the sector also presents opportunities for growth and innovation.
and audit a subsidiary of one of the biggest distributor and supplier of quarry machinery and equipment in Malaysia, Singapore, Indonesia, Thailand, Myanmar and Cambodia. In addition to his audit experience, he also undertook training with UHY Malaysia’s technical head. Hector is also currently part of the De La Salle University college faculty, the Systems Technology
Randolf De Guzman Managing Partner Hector Pascual Senior Partner De Guzman, Pascual & Associates CPAs
Is your jurisdiction looking to reduce the potential for tax- efficient asset management?
Q1 Is your jurisdiction maintaining high taxes as a means of arresting inflation? What effect is this having on private clients? When income tax increases, people have less money to spend, reducing demand for goods and services, which tends to lower the general price level and thereby reduce inflation. Taxes are mandatory contributions levied on individuals or corporations by a
government – whether local, regional, or national. Tax revenues finance all government activities and projects. It goes back to people through essential services and economic benefits. But just as taxes are mandatory, taxes also come off as quite complex. Not quite long ago, taxation in the Philippines underwent a major turn-around which implemented the Comprehensive Tax Reform Program (CTRP). The program aims to expedite poverty reduction, tackle inequality sustainably, and achieve high-income status by 2040 through tax reforms designed to create a fairer, simpler,
and more efficient system that fosters high growth, investment, job creation, and rapid poverty reduction. The four major Tax Reform Packages in the Philippines are: • The Tax Reform for Acceleration and Inclusion (TRAIN) Act (Republic Act 10963) was introduced to create a more progressive tax system in the Philippines. Under this law, low to middle-income earners benefit from reduced income taxes, allowing them to take home more pay. On the other hand, high-income earners are required to contribute more. This approach aims to provide balanced tax treatment for employees across different income levels while also increasing government revenues to fund national development projects. • Sin Tax Reform Law known as TRAIN 2, (Republic Act 11346 and Republic Act 11467) focused on increasing taxes on “sin” products, such as alcohol, tobacco, and sweetened beverages. • The Corporate Recovery and Tax Incentives for Enterprises (CREATE)
Institute College, and the CPA Online Review School teaching the subject Accounting & SAP.
A Collective Investment Scheme (CIS) is rapidly growing in the Philippines, which involves the pooling of funds solicited from the investing public to invest, re-investing, and trading in securities or other assets, as permitted by existing laws. The three common types of CIS are mutual funds (MF), unit investment trust funds (UITF), and variable-unit linked (VUL) insurance. The taxation of passive income and financial intermediaries is under Package 4 of the Comprehensive Tax Reform Program (CTRP), which includes several provisions on the taxation of CIS. The reform of Package 4 on passive income is the unification of tax rates and harmonisation of business taxes on financial intermediaries. Aimed at encouraging greater capital inflow and economic activity, the measure seeks to enhance the competitiveness of capital and financial products by aligning the Philippines’ financial tax regime with that of its regional counterparts. This alignment
+63 4985316351 hector.pascual@dgpcpa.org irglobal.com/advisor/hector-c-pascual
is intended to make the country more attractive to investors and foster a more robust economic environment. Q3 Is wealth management becoming more complex as a result of political or economic drivers? At current, complexity in wealth management is increasing due to a combination of political and economic drivers. Regulatory changes,
Randolf “Dolf” B. de Guzman has been the Managing Partner of De Guzman, Pascual & Associates CPAs since its inception in February 2020. Subsequently, he is the Founder of the advisory firm that bears his name, RBDG Tax & Business Advisory which started in January 2018. His specialisation includes Financial Compliance & Operational Audits, Corporate Services, Business Advisory, Accounting Systems implementation, Forensic Financial investigation, and review of end-to-end processes & procedures of the establishment of businesses in the Philippines. Dolf has extensive knowledge in compliance in specialised industries such as PEZA and BOI. Dolf is also an academic as he has been an Accounting Instructor for the National University of the Philippines on both their Laguna and Cavite Campuses. He serves as a member of the following professional associations namely: Philippine Institute of Certified Public Accountants (PICPA), Association of Certified Public Accountants in Public Practice (ACPAPP), National Association of Certified Public Accountants in Education (NACPAE) and the Insurance Commission (IC). He is also involved in socio-civic organisations as he also is a member of the Rotary Club International, Kiwanis Club International and the Fraternal Order of Eagles – Philippine Eagles.
Act (Republic Act 11534) was enacted to support businesses in recovering from economic challenges and to attract more
About us... dgpcpa.org De Guzman, Pascual & Associates CPAs is a dynamic and business-oriented accounting and consulting company duly accredited and registered at the Board of Accountancy (BOA), Securities & Exchange Commissions (SEC), Bureau of Internal Revenue (BIR), Department of Labor and Employment (DOLE), and a Local Government Unit (LGU) as a general professional partnership. Also, the firm has secured an accreditation with the Cooperative
He finished his Master of Business Administration (MBA) at Philippine Christian University in Manila on March 2024. He passed on both examination of Certified Tax Technician and Certified Forensic Accountant held last November 2023 and January 2024, respectively, and is a bona fide member of those professional associations.
investments to the Philippines. Key features of this Act include the reduction of corporate income tax rates, enhancements to allowable deductions and incentives, rationalisation of fiscal incentives, and the
+63 49 8531 6351 randolf.deguzman@dgpcpa.org irglobal.com/advisor/randolf-b-de-guzman-cpa-mba
Development Authority (CDA) as Cooperative External Auditor (CEA) to complement their services to the ever growing needs of clients.
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