FILE PHOTO: A Senate committee hearing
PASAY CITY, Philippines – Several senators have expressed concerns over the possible impacts of the package two of the Tax Reform for Acceleration and Inclusion (TRAIN) law being pushed by the Duterte administration.
Under the said proposal, the corporate tax will be gradually reduced to 20 percent from 30 percent.
Tax incentives given to some sectors will also be changed.
Lawmakers fear this might lead to mass layoffs and investment losses when enacted into law.
“We should stay that momentum sa pagbaba po ng inflation before we come up with the new tax measures or tax proposal that would scar the investor or pullout investors from existing companies in the Philippines, because what we don’t want to happen is a perfect storm na mataas ang inflation tapos may loss of jobs,” Senate Majority Leader Senator Juan Miguel Zubiri said.
Zubiri said further study is needed before this bill can be passed.
He added that the measure is not among the senate’s priority agenda when Congress resumes its regular sessions next week.
“We are appealing to the department of finance that let us study first this measure carefully, we can pass the other measure, TRAIN 3, TRAIN 4 that are not inflationary,” he said.
The Department of Finance (DOF), however, allays lawmakers’ fears saying the TRAIN 2’s effects are contrary to their concerns.
Finance Undersecretary Karl Chua argued that under the second package, investments and jobs will even grow and higher incentives will be given to firms who will invest in poor provinces.
“What we hope is to encourage registered corporations to get more and better jobs, more efficient and more competitive locate in the countryside, introduce innovation and to invest in agribusiness…kaya yung allegations na Package 2 or Trabaho (bill) will lead to lost of investment , closure of business, job losses and inflationary, sa tingin po namin , based on our proposal ay hindi po totoo,” Chua explained.
The DOF further noted that 645 corporations or 336 sectors have benefited from tax incentives.
Chua added that the administration just wants to level the playing field for all Filipinos and investors.
“At hindi natin alam kung magkano nakuha nila at wala pong libreng incentive, kung may nakinabang tulad ng 0 tax , reduced tax, ibig sabihin may nagbabayad niyan. Normally ang ordinaryong pilipino ang nagbabayad,” he noted.
The DOF believes they will be able to enlighten lawmakers on the provisions of the measure when the senate continues its deliberation in the coming weeks. – Nel Maribojoc