Trust fund for college education of children from poor families eyed – DOF
Robie de Guzman • November 17, 2020 • 559
MANILA, Philippines – The Capital Market Development Council (CMDC) is studying the possibility of creating a child trust fund that would support the tertiary education of children from qualified poor families, the Department of Finance (DOF) said Tuesday.
The DOF said the proposal eyes sourcing the fund from the national and local government units’ contribution. The trust fund will be managed by financial institutions.
“The fund can also either be managed by the government and a part of it can also be cut out to be managed by the private sector,” said National Treasurer Rosalia de Leon, who also acts as treasurer of the CMDC.
“We are still on an exploratory stage and we would like to further do a more detailed or granular study on the CTF and to sell it to the Council in the coming meetings,” she added.
The proceeds from the child trust fund can also be used for daily allowances, transportation expenses, board and lodging and other miscellaneous expenses of public school students.
De Leon said the concept was adopted from the child trust funds implemented in the United Kingdom and Singapore.
In the UK, more than six million child trust fund tax-free accounts were set up to prepare for future educational expenses or for any other purpose that would benefit children born between Sept. 1, 2002 and Jan. 2, 2011.
An initial seed money of 250 or 500 British pounds per child was provided by the UK government and the accumulated amount can be withdrawn once the children reach 18 years of age.
Meanwhile, in Singapore, the government contributes a total of 4,000 Singapore dollars over ten schooling years of primary and secondary education of each child-beneficiary under its Edusave Scheme, which automatically covers all 7-year old Singaporeans.
With no withdrawal restrictions, the beneficiaries can take out money from their accounts even before their maturity, provided that they use the proceeds for educational purposes. The government closes each account and transfers the unused fund balance once the child-beneficiary reaches 16 years of age.
Aside from providing an education fund for poor families’ children, the child trust fund also aims to revive the “savings culture” in the country, according to Consuelo Garcia, Liaison Director for Capital Markets of FINEX.
“It is actually to be the missing link to what we have right now. The PERA (Personal Equity and Retirement Account (PERA) is for the working class. This one is for the young people. The baby boomers already got left behind so I think we could have this as a starting point,” she said.
De Leon noted that a survey done by the Philippine Statistics Authority (PSA) in 2017 showed that around 18 percent of out-of-school youths have cited financial woes as their main hindrance to getting an education, despite a conditional cash transfer program being implemented by the government.
She said the CTF will provide a solution to one of the hindrances to the country’s commitments to the United Nations’ Sustainable Development Goals (SDGs), of which the fourth one is Quality Education.
MANILA, Philippines – All importations of COVID-19 vaccines will now be included in the “Mabuhay” or express lane of the Department of Finance to allow quick processing of the tax and duty exemptions of these shipments, the department said.
In a statement issued on Thursday, the DOF said Finance Secretary Carlos Dominguez III approved the inclusion of vaccine imports to allow for the expedited processing of the tax and exemptions for vaccine applications.
Under Department Order 29-94, the Mabuhay Lane is tasked to expeditiously process applications for the tax and duty exemption of certain groups of importers, which include export-oriented firms, returning residents (balikbayans) and non-profit, non-stock educational institutions.
COVID-19 vaccine tax exemption applications in the Mabuhay Lane, which is under the DOF’s Revenue Office, will be processed within 24 working hours, the department said.
These tax exemption policies will be incorporated in the inter-agency guidelines on the implementation of a one-stop shop for international donations and government-procured COVID-19 vaccines, the department added.
Dominguez also approved the waiving of filing fees for COVID-19 vaccine applications under the Mabuhay Lane and the use of the Tax Exemption System Online Filing Module in processing the vaccine imports “to further support the government’s rollout of the COVID-19 vaccination program.”
“We add that the Mabuhay Lane currently processes all Relief Consignment under Section 120 in relation to 121 of the Customs Modernization and Tariff Act (CMTA). The Lane is expected to process all COVID-19 vaccines which may qualify as relief consignment,” Finance Undersecretary Antonette Tionko said.
Relief Consignment refers to goods donated to national government agencies and accredited private entities for free distribution to, or for the use of, victims of calamities.
Under Section 121 of the CMTA, relief consignment imported during a state of calamity and intended for the use of calamity victims shall be exempted from the payment of duties and taxes.
MANILA, Philippines—The Department of Finance (DOF) has ordered the Bureau of Customs (BOC) to heighten its security against pork smuggling .
Finance Secretary Carlos Dominguez III wants a tighter watch over the possible misdeclaration or misclassification of pork shipments entering the country.
The order was issued after President Duterte approved in principle the recommendation of the Department of Agriculture (DA) to expand the minimum access volume (MAV) allocation for pork imports.
Dominguez said some importers may misdeclare their pork shipments to avoid paying higher import duties. The current tariff on pork within the MAV is at 30 percent, while off-quota imports are taxed a higher 40 percent.
“Edible offal (entrails) of bovine animals, such as swine, sheep and goats are taxed much lower, which some importers may declare [for their] prime pork shipments to avoid paying higher import duties,” the DOF said in a statement.
Meanwhile, Customs Commissioner Rey Leonardo Guerrero assured that the bureau has been closely monitoring the imports of meat products, including pork and chicken. AAC
MANILA, Philippines – President Rodrigo Duterte has authorized the Department of Finance (DOF) to enter into talks with the United States Trade and Development Agency (USTDA) for a possible $809,450 or about P39-million grant to assist the Bureau of Internal Revenue (BIR) in its digital transformation program.
In a statement issued on Wednesday, the DOF said the president has approved its request for a Special Authority designating and authorizing its senior officials “to negotiate and/or facilitate, in accordance with law, for and on behalf of the Government of the Republic of the Philippines (GPH), with the authorized representatives of the USTDA.”
The Special Authority covers the negotiations for an agreement on the grant of $809,450.00 (approximately P38,850,873.20) by the USTDA for the BIR’s Information and Communications Technology (ICT) Modernization Strategy and Data Center Technical Assistance Project.
The DOF said that Duterte also designated and authorized Finance Secretary Carlos Dominguez III or BIR Commissioner Caesar Dulay “to conclude, sign, execute and deliver the said Grant Agreement.”
The BIR project aims to modernize the bureau’s infrastructure and operational environment, it added.
“The project funded by the USTDA grant will ensure an in-depth technical assessment of the BIR’s current ICT environment, the development of an Enterprise Architecture roadmap/framework, and an assessment of the organizational framework of the BIR’s Information System Group (ISG) including recommended restructuring and training programs,” the DOF said.
Dominguez has cited the BIR’s digital transformation efforts as among the factors that led to a dramatic improvement of its services to taxpayers and its robust collection performance ahead of the COVID-19 pandemic-induced crisis.
He said the digitally enhanced administrative reforms being undertaken by the BIR are now beginning to pay off by way of the significant improvement in the country’s tax effort from 13 percent of gross domestic product (GDP) in 2015 to 14.5 percent of GDP in 2019.
The digital switch has also led to the more convenient and efficient electronic filing of tax payments, especially during this coronavirus pandemic, he added.
Starting February 14 last year, the BIR allowed the use of the PayMaya mobile application as an additional electronic payment channel for tax payments.
On top of PayMaya, these other e-payment tools are GCash, LandBank Linkbiz, DBP PayTax, Union Bank Online and PESONet.
The BIR has also improved the tax forms deployed in the e-BIR Forms System to make the filing of tax returns more accessible and convenient to taxpayers.
It began the pilot implementation in April 21 last year of its web-based Internal Revenue Integrated System (IRIS) that will be the central tool and repository to process taxpayers’ information, the DOF said.
The IRIS is targeted to be available nationwide by the end of 2021.
The Finance department added that an Electronic Audited Financial System (eAFS) was also launched last June 1 to allow business taxpayers to electronically submit their financial statements to the BIR.
The BIR also launched on October 19 its eAppointment Facility which aims to enable taxpayers to continue consulting revenue officials on their tax-related concerns even with the mobility restrictions imposed to curb the spread of COVID-19.
In November 2020, the BIR also opened its web-based Procurement, Payment, Inventory and Monitoring System (PPIMS) and its Online Application for Tax Clearance for Bidding Purposes (eTCBP), according to the DOF.
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