logo
PH to implement crypto-assets reporting framework

PH to implement crypto-assets reporting framework

GMA Network18-06-2025
The Department of Finance (DOF) on Wednesday said the Philippines is committing to implement a framework on reporting crypto-assets in a bid to combat cross-border tax evasion and illicit financial flows.
In a statement, the DOF said the commitment to execute the Crypto-Asset Reporting Framework (CARF) by 2028 was signified by DOF Revenue Operations Group Undersecretary Charlito Martin Mendoza during the 8th Asia Initiative Meeting in Malé, Maldives held from May 26 to 29, 2025.
The CARF institutionalizes the framework for the reporting and automatic exchange of information in relation to crypto-assets between tax authorities for tax compliance purposes.
The Philippines now joins 67 other jurisdictions already committed to implementing the CARF by 2027 or 2028.
'We need faster and stronger systems for collaboration if we are to beat tax evasion and illicit transactions. This is a timely commitment as digital currency becomes one of the preferred means for transactions,' said Finance Secretary Ralph Recto.
'The government must ensure that crypto-asset users are paying their fair share of taxes and that no illicit financial activity goes unpunished,' added Recto. —VAL, GMA Integrated News
Orange background

Try Our AI Features

Explore what Daily8 AI can do for you:

Comments

No comments yet...

Related Articles

PH mulls higher license fees for online gambling
PH mulls higher license fees for online gambling

GMA Network

timea day ago

  • GMA Network

PH mulls higher license fees for online gambling

Philippine financial regulators are eyeing an increase in license fees for online gambling companies, as officials study stricter regulations from the industry after being flagged by the Department of Health (DOH) as a "public health concern." According to Finance Secretary Ralph Recto, the government is looking to increase revenues from the industry, as integrated resorts also involved in online games are now charged 25% of their gross gaming revenues (GGR). 'Pwede gawing (It can be made) 30 [percent], pwede gawing 35 [percent], pwede gawing 40 [percent],' he told reporters at the sidelines of the Post-SONA Discussions in San Juan City. 'We're studying that because if it's too high, baka naman lalo lumago din 'yung illegal (it might lead to a rise in illegal operations), so we're studying that with PAGCOR (Philippine Amusement and Gaming Corp.),' he added. This comes as the DOH has flagged online gambling as a health issue, with President Ferdinand 'Bongbong' Marcos Jr. saying he will study calls to ban the industry. A number of lawmakers have pushed for a ban given worries that addiction is soaring, with more gamblers drawn to online platforms, even further accelerated by advertisements on social media and e-wallet platforms. 'I am not in favor of gambling, okay? I have never gambled. Hindi ako mahilig. (I am not keen). Dapat 'yung mga kababayan din natin (And I think my Filipinos shouldn't be either). My advice: do not gamble. Having said that, if people gamble, we'd rather regulate it than they go to illegal (gambling),' Recto said Tuesday. At present, Recto said his understanding is that 60% of operations are illegal, while only 40% is legal. From those above board, the DOF is looking to raise P200 billion in revenues this year — P100 billion from brick and mortar, and P100 billion from online. ?Recto also said 'everything is on the table' when it comes to proposals, such as limiting the time of users to cash in, as well as limiting the access of online gambling sites to e-wallets. 'I'm open to all of that, but we will consult with PAGCOR also kasi sila 'yung marami dito. It's their constituency to a certain degree. Mas alam nila (They are more knowledgeable),' he said. For their part, licensed online gambling operators said they are standing united with PAGCOR to call for stronger regulation and not a total ban, as they warned that Filipinos might shift to unregulated sites on the black market. —VAL, GMA Integrated News

DOF eyes strengthening info campaign amid spread of fake news on CMEPA
DOF eyes strengthening info campaign amid spread of fake news on CMEPA

GMA Network

time20-07-2025

  • GMA Network

DOF eyes strengthening info campaign amid spread of fake news on CMEPA

The Department of Finance (DOF) on Sunday said it is looking into amplifying its public information campaign following the spread of viral posts on interest income. 'Sa ngayon, hindi pa namin alam kung bakit ito nag-viral. Lesson learned ito sa DOF that we need to intensify our campaign information particularly sa aming mga reporma,' DOF Assistant Secretary Karlo Adriano told Super Radyo dzBB. (As of now, we still don't know why it went viral. This serves as a lesson for the DOF to strengthen our public information efforts, particularly regarding our reforms.) In a separate dzBB interview, Senator Sherwin Gatchalian said the spread of fake news related to the Capital Markets Efficiency Promotion Act (CMEPA) is a move intended to scare and deceive the public. 'Sinasadya talagang linlangin at i-confuse ang ating mga kababayan (It's a clear attempt to mislead and confuse the public),' Gatchalian said. The spread of fake news came right after the passage of the Capital Markets Efficiency Promotion Act (CMEPA), which mandates banks to implement the uniform 20% final withholding tax (FWT) on interest income, regardless of the term or currency denomination, starting this month. The passage of the CMEPA gained public attention, perhaps due to confusion, as several online posts have circulated claiming it imposes a 20% tax on total savings or bank deposits. 'Ang binubuwisan natin since 1998 ay 'yung interest income ng inyong savings sa bangko. Kumikita 'yan ng interest kapag natutulog sa bangko at 'yan ay binubuwisan ever since 1998,' Adriano explained. (What we've been taxing since 1998 is the interest income from your bank savings. That money earns interest while sitting in the bank, and it has been taxed since 1998.) — RF, GMA Integrated News

Should you bother about CMEPA's 20% tax on interest earned from savings?
Should you bother about CMEPA's 20% tax on interest earned from savings?

GMA Network

time18-07-2025

  • GMA Network

Should you bother about CMEPA's 20% tax on interest earned from savings?

The spotlight is on the Capital Markets Efficiency Promotion Act (CMEPA), signed into law by President Ferdinand 'Bongbong' Marcos Jr. last May and took effect this month, because of a provision that standardized the tax rate on interest income earned on savings or deposit products in a bank. This provision might have caused public confusion, perhaps due to several posts circulating that it imposes a 20% tax on total savings. The Department of Finance (DOF) has since clarified that only the interest earned from a depositor's savings in a bank is taxed 20%, and not the amount of savings itself. Under CMEPA, all interest income deposited in banks is charged a 20% withholding tax, which local banks started to implement on July 1, 2025. 'A final tax of 20% is hereby imposed upon the amount of interest yield, or other monetary benefit earned or received from any currency bank deposit, deposit substitute, trust fund, or other similar arrangements,' Section 6 of the measure reads. Clearly, the law does not slap tax on total savings deposited in a bank, but on the interests it earns. What is CMEPA? The Republic Act No. 122141 or CMEPA amended several provisions of the National Internal Revenue Code, namely sections 22, 24, 25, 27, 28, 32, 34, 38, 39, 42, 51, 56, 57, 127, 149, 174, 176, 179, 190, 199, and 258, to 'harmonize' and simplify taxation of passive income across financial instruments in a bid to encourage wider public participation in the country's capital markets. The law defines 'passive income' as any income earned from sources that do not require a taxpayer's active pursuit and performance of trade or business. CMEPA and the 20% interest tax: What gives? Prior to CMEPA's enactment into law, all interest earned in a regular savings account is already charged 20%. Interviewed on Super Radyo dzBB, Finance Secretary Ralph Recto said, '1998 pa may buwis 'yan.' Recto said 99.6% of depositors or those with regular savings accounts are already being taxed on the interest they earned before the law took effect. Below is a sample computation from the Asian Consulting Group (ACG), which shows how a 20% tax on interest earned in a year at 0.250% could be reflected in a regular savings account with P100,000: Before CMEPA After CMEPA Interest earned at 0.250% (1year) P250 P250 Less: 20% final withholding tax P50 P50 Interest income received P200 P200 Prior to the uniform tax rate, taxes on interest earned from savings were tiered and based on the maturity or lock-in periods — 20% for those less than three years; 12% for three years to less than four years; 5% for four years to less than five years; exemptions for more than five years; and 15% for foreign currency deposit units (FCDUs) or dollars. The Finance chief said that only 0.4% of depositors enjoyed the preferential tax rates. 'Kaya ginawang uniform… kasi 0.4% lang ang may long-term savings,' Recto said. With the law in effect, those who will open a long-term time deposit account would now bear the 20% tax on the interest they earn, which was previously tax-exempt if the maturity was over five years. Below is a sample computation from ACG for a seven-year time deposit of P500,000 earning an annual interest rate of 2.50%: Before CMEPA After CMEPA Interest earned (1 year) P12,500 P12,500 Less: 20% final withholding tax Tax-exempt P2,500 Interest income earned P12,500 P10,000 ACG chief tax advisor Mon Abrea echoed Recto's explanation, saying that the 20% tax on interest earned from savings is 'not a new tax.' 'The recently enacted Capital Market Efficiency and Protection Act (CMEPA) does not introduce a new tax on savings or deposit accounts. Interest income from such deposits has long been subject to a 20% final withholding tax under the Tax Reform Act of 1997,' Abrea said. 'What CMEPA does is standardize the tax treatment by also imposing the same 20% final tax on interest income from long-term time deposits, which were previously exempt if held for more than five years. This reform promotes fairness and consistency in the Philippine tax system and aligns with international best practices, where interest income - regardless of the term - is generally subject to tax,' the tax expert said. The Finance Department has further clarified that the standardized tax rate of 20% is 'not retroactive,' meaning it does not apply to financial instruments that were issued or transacted prior to July 1, 2025. 'Therefore, existing long-term deposits made prior to the effectivity of the law will continue to enjoy the preferential rate until their maturity,' the DOF said. Fair or regressive? The Finance Department has argued that the previous 'special tax treatment' favored depositors who can afford to park their savings in long-term deposits, which made the tax unfair for short-term depositors who face liquidity issues and need immediate access to their funds. 'The CMEPA merely corrects this outdated and inequitable system that has placed a heavier burden on ordinary Filipinos who do not have the extra cash to put in banks for longer periods,' the DOF said. Non-profit economic research group IBON Foundation's executive director Sonny Africa, however, is not convinced that the law's standardized tax rate is 'equalizing.' 'Standardizing tax rates may sound fair but equalizing tax on interest income at 20% will be regressive in effect because ordinary savers will end up paying the same rate as the ultra-rich. The DOF is being insensitive — equal treatment of unequals is unequal in effect,' Africa said. 'The uniform 20% tax on interest income is regressive because ordinary savers will pay the same rate as the ultra-rich,' he added. Citing a report from the Bangko Sentral ng Pilipinas, IBON's executive director said that 20.1 million or three out of four Filipino families 'didn't have any savings as of the end of 2024.' 'This brute fact should put into context any hype that the new law empowers ordinary Filipinos,' Africa said. Nevertheless, CMEPA does not impose the unified tax rate to provident savings programs under the Social Security System (SSS) and the Home Development Mutual Fund or Pag-IBIG such as the MP2 and would remain exempt from tax. 'The tax exemptions on SSS, GSIS, Pag-IBIG are welcome because these are public schemes," Africa said. Capital markets With the law's aim to encourage wider public participation in the country's capital markets, CMEPA reduced the stock transaction tax (STT) rate from 0.6% to 0.1%, decreasing the documentary stamp taxes (DST) on original issuance of shares from 1% to 0.75%, and removing the DST on collective investment schemes. It also imposes a uniform 0.75% DST on bonds, debentures, and certificates of stock or indebtedness issued in foreign countries, regardless of jurisdiction, which the government said reinforces neutrality in the tax system. 'These measures are seen to cut transaction costs, encourage market participation and financial planning, boost market liquidity, make the country's equities market regionally competitive, and increase capital market growth,' the DOF said. Rizal Commercial Banking Corp. Chief Economist Michael Ricafort said the CMEPA would help attract more large foreign and local investors with lower stock transactions tax/costs, vis-a-vis other ASEAN/Asian stock markets, as part of making our markets more cost competitive for transactions. 'More importantly, the CMEPA Law would help structurally attract more large scale foreign fund managers and better compete with other ASEAN/Asian markets in terms of reduced transaction costs/taxes, assuming all other factors are the same. Thus, IPOs (initial public offering) and other share sales would correspondingly increase with more stock market transactions/trading activities as incentivized by CMEPA Law,' Ricafort said. IBON's Africa, however, said ordinary low-income Filipinos could not be empowered by CMEPA's new tax structure which, he said, 'clearly also wants to drive money, including from ordinary lower-income families into capital markets.' 'Instead of pushing them to be investors in volatile capital markets and shifting risk to individuals, the government should give more attention to securing decent wages and basic incomes, pensions, and social protections,' Africa said. 'Reducing the stock transaction tax and documentary stamp tax will benefit high-volume large investors or brokers, but ordinary savers are not suddenly empowered by this. They are still burdened by unaffordable risk, lack of disposable income, and poor financial literacy. The DOF should stop thinking that Filipinos are all rich and that financial markets are somehow substitutes for social security systems,' he added. The DOF estimates CMEPA to generate P9.0-billion worth of revenues from 2025 to 2028, the end of the term of the current administration. It is expected to raise P500 million this year; P1.6 billion in 2026; P2.8 billion in 2027; and P4.1 billion in 2028. The government is looking to generate P4.520 trillion in 2025 and P4.983 trillion in 2026 based on the latest report of the Development Budget Coordination Committee (DBCC). — BAP, GMA Integrated News

DOWNLOAD THE APP

Get Started Now: Download the App

Ready to dive into a world of global content with local flavor? Download Daily8 app today from your preferred app store and start exploring.
app-storeplay-store