MANILA The House of Representatives on Monday approved on final reading the administration’s second tax reform package, which aims to lower corporate income taxes (CIT) and modernize incentives.
With 187 affirmative votes, 14 negative votes, and three abstentions, the lower chamber approved on third reading House Bill No. 8083 or the Tax Reform for Attracting Better and Higher Quality Opportunities (TRABAHO) bill.
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 every two years starting in 2021.
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.
He said the Philippine corporate income tax rate of 30 percent is one of the highest in Southeast Asia (SEA) and prevents the country from attracting much-needed foreign investment.
He said lowering the corporate income tax will provide big relief to the country’s small and medium enterprises, which represent about 95 percent of all corporate taxpayers in the country.
Cua said the Trabaho bill would also modernize the country’s tax incentives regime to ensure it is “targeted, time-bound, and effective.”
Cua said the proposed incentives regime will be biased to development outside urban areas.
Nueva Ecija Rep. Estrellita Suansing, another sponsor of the measure, said the second tax reform package aims to “enhance fairness, improve competitiveness, plug tax leakages and achieve fiscal sustainability” by reforming the corporate income tax system.
“This proposed measure is crucial and vital to the agenda of the Duterte administration, which includes infrastructure development, education for all, access to health care and social protection,” Suansing said.
The bill was approved on second reading on September 4. (PNA)
Source: Philippine News Agency