Newly Submitted TRAIN Law 2 Will Focus More On Businesses

After targeting the working sectors in the first Tax Reform for Acceleration and Inclusion (TRAIN), CNN Philippines reports that Duterte will target businesses in the second package.

Finance Secretary Sonny Dominguez said on Tuesday that the same with the first TRAIN,  the second bill proposes to cut down income tax, but in turn, it should also correspond with lower tax incentives.

Tax
PHOTO CREDIT: Pixabay

“Our plan is to initially lower the tax rate for corporations from 30% to 25%. But our proposal to Congress is to allow us to do that only if there is a reduction in the amount that we provide for incentives,”

The second package of TRAIN was filed by the Department of Finance with the Congress last January 15. They hope to have it passed within this year.

As of today, Dominguez said that there are 333 laws and 14 government agencies that are giving incentives for companies. He mentioned that in 2015 alone, the government waived P301 billion of corporate taxes.

Meanwhile, Socioeconomic Planning Secretary Ernesto Pernia said on Tuesday that the BPO industry was a “major contributing factor to (the) decline” of the Philippine economy in 2017.

The Finance Department pointed out that the BPO’s are the second biggest recipient of tax incentives. This is because many BPO companies argue that they need those perks to be able to compete abroad.

But with this, Dominguez believes otherwise.

“They are already getting special consideration at the moment. Aren’t they? They only pay 5 percent of net income. Isn’t that special consideration? We will have to review that,”

He also added that these tax perks should be given to the most important sectors in the country, he also said that there should be transparency on how it should be used and it also has to be time-bound.

“Some guys have been receiving incentives for 40 years… Shouldn’t people grow up and compete with the rest of the world?”

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