House approves bill granting tax exemptions to rural banks

THE HOUSE Committee on Ways and Means has approved a proposed measure granting rural banks tax exemptions for the first five years of their operations

In a hearing on Monday, the House tax panel approved the tax provisions under a substitute bill that consolidated proposed measures that aim to strengthen the country’s rural banking system.

“The committee hereby approves the Substitute Bill to House Bills 4256, 4622, 5143 and 8359,” the committee’s chair, Albay Representative Jose Ma. Clemente S. Salceda, said on Monday.

The bill was initially approved by the House Committee on Banks and Financial Intermediaries and will be up for plenary debates once Congress resumes its session.

Based on the recommendations of the House tax committee, which were also okayed by the House banks panel during the hearing, rural banks created after the measure is enacted will be exempted from all taxes and fees, except corporate income and local taxes, for the first five years of their operations.

A surviving rural bank or consolidated rural banks due to mergers will also be exempted from all taxes, charges and fees, except for corporate income tax and local taxes, during their first five years of business.

The initial substitute bill proposed that rural banks be exempted from all taxes, fees, and charges without providing a period for the perk.

Mr. Salceda said these recommendations were made so the measure “won’t be vetoed.” — GMC