The Philippines and Singapore have started negotiations to update a nearly five-decade-old tax agreement, the Department of Finance (DOF) said on Thursday.
The DOF said the first round of talks to modernize the 1977 Double Taxation Agreement (DTA) was held on September 2 to 4.
The objectives of the talks include updating the treaty to make it adapt to the modern digital economy and align it with new international tax standards.
The negotiations aim “to keep pace with the demands of the modern economy and strengthen bilateral and investment relations that will translate to more jobs for Filipinos,” the DOF statement said.
Finance Secretary Ralph G. Recto said the revision is crucial to enhancing investor certainty and lowering business costs.
“It’s high time we recalibrated the terms to reflect the realities of today’s rapidly shifting global economy,” Recto said.
He added that the DOF will ensure the new agreement is “fair and favorable” to both nations to spur investment that generates employment.
The initiative is also geared toward attracting foreign direct investment (FDI).
Singapore’s ambassador to the Philippines Constance See said FDI from his country to the Philippines has grown by 14 percent over the past five years.
“Renegotiating the DTA will give a very positive signal to the business community that our governments share a commitment to enhancing cross-border economic activity,” See said.
The September negotiations included Philippine representatives from the DOF and the Bureau of Internal Revenue (BIR).
