Raffy Pekson II was inspired by one of the financial coaches I also follow, Randell Tiongson. After attending one of Randell's seminars, he featured a new investment program by Banco De Oro (BDO) that makes it easy to save up and start investing.
In a nutshell, the investment plan encourages you to open a BDO savings account where you will base your transactions. If your current company is already using BDO for your payroll account, you may skip this step already and simply enroll your BDO payroll account in the program.
From your BDO account, the program will automatically deduct at least Php 1,000.00 every month. When your accumulated contributions have reached Php 10,000.00, BDO will turn your contributions into a UITF account. From here, you can leave your money to grown in the hands of the BDO Trust Group. For a briefer on what a UITF is, you can read this short explanation by Randell Tiongson.
For more information you can read up on this investment plan on Randell Pekson's blog. But before you start out with that article, you may do well to read his introductory article about his realizations on financial wellness after attending Randell's seminar.
Showing posts with label investment. Show all posts
Showing posts with label investment. Show all posts
Tuesday, August 23, 2011
PERA Tax Rules Ready
by: Diane Claire J. Jiaosource: Business WorldTAX RULES needed to implement the much-awaited Personal Equity and Retirement Account (PERA) scheme have been submitted to the Finance department and are pending approval.
The proposed revenue regulations, among others, set stringent guidelines for tax credit certificates (TCCs) that will be granted to overseas Filipino workers (OFWs) to ensure that these are not used fraudulently.
“We submitted the PERA Revenue Regulations [last week] to the DoF (Department of Finance,” Bureau of Internal Revenue Commissioner Kim S. Jacinto-Henares said on Friday.
Finance officials were not immediately available for comment as to when, or if, the BIR’s tax rules would be issued.
The PERA Act or Republic Act 9505 was signed into law in 2008 and its implementing rules were issued the following year by the Securities and Exchange Commission and the Bangko Sentral ng Pilipinas.
The law, however, has not been implemented up to now given the absence of BIR tax rules.
A stumbling block was the issuance of tax credits to OFWs that could be difficult to monitor for the bureau, Ms. Henares explained.
“We were focused on making safeguards regarding the use of TCCs,” she said.
One of these is the printing of the tax credits on a special security paper so that the documents cannot be copied and counterfeited, Ms. Henares said.
Migrant Filipinos will also have to apply for a tax debit memo when they use their TCCs, stating how much of the tax credits will be claimed and for what tax obligation.
The BIR will also establish internal records of TCC recipients, Ms. Henares said.
“This will ensure that only those who are qualified for the TCCs will get to enjoy it,” she noted.
This was also suggested by Tammy H. Lipana, chairperson of the Philippine Chamber of Commerce and Industry’s tax committee.
“There should be a registry of the TCCs issued, whether directly to OFWs or coursed through the embassies to OFWs,” Ms. Lipana said in a telephone interview on Friday.
“The tax debit memos also ensure that the BIR still gets to approve how the TCCs can be used,” she added.
INVESTMENT ALTERNATIVE
The PERA Act provides Filipinos with an alternative means of planning their retirement, allowing the establishment of accounts where they can contribute a maximum of P100,000 per year. Those working abroad have been provided a higher annual cap of P200,000. Five PERAs can be maintained at any one time but the annual contributions must not exceed the set limits.
PERA investment and reinvestment income will be exempted from a slew of taxes such as the 20% final withholding tax on bank deposits, 10% tax on cash or property dividends and the stock transaction tax on shares traded through the stock exchange.
A tax credit equivalent to 5% of all PERA contributions will also be granted to account holders. OFWs will receive TCCs which they can use to pay their internal revenue taxes. Resident Filipinos, meanwhile, will just get a BIR certification that will be used by employers to adjust taxes on their income.
The PERA Act is expected to attract an estimated eight million Filipinos, especially OFWs and self-employed individuals who are not required to contribute to the Social Security System and theGovernment Service Insurance System.
“The implementation of the PERA act is very much anticipated. Right now, when you save up for your retirement, there are no tax benefits with it,” Ms. Lipana said.
A possible sticking point, though, is that OFWs may not have any use for their TCCs since they are exempted from income taxes under the law, she pointed out.
The BIR’s Ms. Henares, however, said OFWs could have other tax liabilities.
“If they have real estate [assets and they sell this], that is subject to capital gains tax. If they have sidelines and other businesses here in the Philippines, that is subject to income tax,” she responded.
“Also, if the OFWs return to the Philippines to work here, they will have to pay income tax already. They will be able to use their TCCs then,” Ms. Henares added.
The proposed revenue regulations, among others, set stringent guidelines for tax credit certificates (TCCs) that will be granted to overseas Filipino workers (OFWs) to ensure that these are not used fraudulently.
“We submitted the PERA Revenue Regulations [last week] to the DoF (Department of Finance,” Bureau of Internal Revenue Commissioner Kim S. Jacinto-Henares said on Friday.
Finance officials were not immediately available for comment as to when, or if, the BIR’s tax rules would be issued.
The PERA Act or Republic Act 9505 was signed into law in 2008 and its implementing rules were issued the following year by the Securities and Exchange Commission and the Bangko Sentral ng Pilipinas.
The law, however, has not been implemented up to now given the absence of BIR tax rules.
A stumbling block was the issuance of tax credits to OFWs that could be difficult to monitor for the bureau, Ms. Henares explained.
“We were focused on making safeguards regarding the use of TCCs,” she said.
One of these is the printing of the tax credits on a special security paper so that the documents cannot be copied and counterfeited, Ms. Henares said.
Migrant Filipinos will also have to apply for a tax debit memo when they use their TCCs, stating how much of the tax credits will be claimed and for what tax obligation.
The BIR will also establish internal records of TCC recipients, Ms. Henares said.
“This will ensure that only those who are qualified for the TCCs will get to enjoy it,” she noted.
This was also suggested by Tammy H. Lipana, chairperson of the Philippine Chamber of Commerce and Industry’s tax committee.
“There should be a registry of the TCCs issued, whether directly to OFWs or coursed through the embassies to OFWs,” Ms. Lipana said in a telephone interview on Friday.
“The tax debit memos also ensure that the BIR still gets to approve how the TCCs can be used,” she added.
INVESTMENT ALTERNATIVE
The PERA Act provides Filipinos with an alternative means of planning their retirement, allowing the establishment of accounts where they can contribute a maximum of P100,000 per year. Those working abroad have been provided a higher annual cap of P200,000. Five PERAs can be maintained at any one time but the annual contributions must not exceed the set limits.
PERA investment and reinvestment income will be exempted from a slew of taxes such as the 20% final withholding tax on bank deposits, 10% tax on cash or property dividends and the stock transaction tax on shares traded through the stock exchange.
A tax credit equivalent to 5% of all PERA contributions will also be granted to account holders. OFWs will receive TCCs which they can use to pay their internal revenue taxes. Resident Filipinos, meanwhile, will just get a BIR certification that will be used by employers to adjust taxes on their income.
The PERA Act is expected to attract an estimated eight million Filipinos, especially OFWs and self-employed individuals who are not required to contribute to the Social Security System and theGovernment Service Insurance System.
“The implementation of the PERA act is very much anticipated. Right now, when you save up for your retirement, there are no tax benefits with it,” Ms. Lipana said.
A possible sticking point, though, is that OFWs may not have any use for their TCCs since they are exempted from income taxes under the law, she pointed out.
The BIR’s Ms. Henares, however, said OFWs could have other tax liabilities.
“If they have real estate [assets and they sell this], that is subject to capital gains tax. If they have sidelines and other businesses here in the Philippines, that is subject to income tax,” she responded.
“Also, if the OFWs return to the Philippines to work here, they will have to pay income tax already. They will be able to use their TCCs then,” Ms. Henares added.
Wednesday, November 18, 2009
Real Investment Options in the Philippines
Investment is a very scary word right now, especially after the global financial crisis and the series of lay-offs that happened. However, it is even scarier precisely because of our inadequate financial intelligence. I have been observing different employees for a long time, and realized that not a lot of people know what to do with their own money.
Around my second year of work, one of my friends gave us a lot of advice about finances and how to handle our money. Because of his advice, I was able to weather through many financial emergencies with very little sweat. This man is now holding public seminars teaching people what to do with their money, and I highly recommend his talks.
His event is publicized using Facebook at this link, and here are the details of his next seminar:
Curious about stocks? Interested in insurance? Wary about pre-need? If you've ever been at a loss as to where to put your hard-earned money, then this is the event for you. Learn how to compare and contrast the different investment options available here in the Philippines. From stocks, bonds, managed funds, bank products, insurance, pre-need, off-shore and alternative investments -- Learn what each instrument can and cannot do as well as where you can avail of them. More importantly, learn how to determine for yourself which product is best suited for your particular needs as well as how you can protect yourself from the many scams that abound.
Call 994-7424 to book a seat now.
Around my second year of work, one of my friends gave us a lot of advice about finances and how to handle our money. Because of his advice, I was able to weather through many financial emergencies with very little sweat. This man is now holding public seminars teaching people what to do with their money, and I highly recommend his talks.
His event is publicized using Facebook at this link, and here are the details of his next seminar:
| Date: | Saturday, November 21, 2009 |
| Time: | 12:30pm - 5:00pm |
| Location: | Unit 602, Center Point Building, Julia Vargas Ave., Ortigas Center, Pasig City |
Curious about stocks? Interested in insurance? Wary about pre-need? If you've ever been at a loss as to where to put your hard-earned money, then this is the event for you. Learn how to compare and contrast the different investment options available here in the Philippines. From stocks, bonds, managed funds, bank products, insurance, pre-need, off-shore and alternative investments -- Learn what each instrument can and cannot do as well as where you can avail of them. More importantly, learn how to determine for yourself which product is best suited for your particular needs as well as how you can protect yourself from the many scams that abound.
Call 994-7424 to book a seat now.
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