MANILA The House of Representatives on Tuesday approved on second reading the administration's second tax reform package, which aims to lower corporate income taxes (CIT) and modernize incentives.
The lower chamber passed via voice vote House Bill No. 8083 or the Tax Reform for Attracting Better and Higher Quality Opportunities (TRABAHO) bill.
House ways and means committee chairman Dakila Cua, sponsor of the measure, said the Trabaho bill does not impose new taxes, but instead aims to create more jobs by attracting the right set of investments through incentives.
"Ang layunin po nito ay ang paglikha ng mas maraming trabaho at oportunidad sa ating bansa sa pamamagitan ng paghikayat sa pribadong sektor na tumaya at mamuhunan sa Pilipinas at palaguin ang kanilang negosyo rito (The goal of this bill is to create more jobs and opportunities in our country by encouraging the private sector to bet, invest, and grow their businesses here in the Philippines)," Cua said.
From the current base rate of 30 percent, the bill seeks to gradually lower corporate income tax to 20 percent by 2029. It proposes to bring down the CIT by two percentages per year starting in 2021.
He explained that the Philippine corporate income tax rate of 30 percent is one of the highest in Southeast Asia and prevents the country from attracting the much-needed foreign investment.
Cua said the Trabaho bill would also modernize the country's tax incentives regime to ensure it is "targeted, time-bound, and effective."
He said the proposed incentives regime will be biased to development outside urban areas.
The bill seeks to grant income incentives for a maximum of five years, except in projects located in lagging areas and areas recovering from armed conflict or major disasters; projects in agri-business outside major urban areas; or projects relocated from major urban areas. These exceptions may enjoy additional two years of incentives. (PNA)
Source: Philippine News Agency