By CHARISSA M. LUCI- ATIENZA
The House Committee on Ways and Means approved yesterday the substitute bill on the Duterte administration’s corporate tax reform package, which seeks to lower the corporate income tax rates and rationalize fiscal incentives.
After more than two hours of deliberations, the panel, chaired by Quirino Rep. Dakila Cua passed the still unnumbered substitute measure, which provides for two-percent cuts in the corporate income tax every two years from Jan. 1, 2021 to Jan. 1, 2029.
From the current 30-percent corporate income tax rate, the substitute bill proposes that the tax rate shall be 28 percent beginning Jan 1, 2021; 26 percent beginning Jan 1,2023; 24 percent on Jan 1, 2025; 22 percent on Jan 1, 2027 and 20 percent on Jan 1, 2029.
The bill provides that the President may advance the scheduled reduction in the corporate income tax rate when adequate savings are realized from the rationalization of fiscal incentives, as certified by the Secretary of the Department of Finance (DoF).
The motion to approve the bill was made by Albay Rep. Joey Salceda and was seconded by Parañaque Rep. Gus Tambunting.
Cua said the bill will be called “Tax Reform for Attracting Better and High- Quality Opportunities” or TRABAHO bill since the measure is expected to create jobs, especially in the countryside. He expressed hope that the Senate would give the measure a chance as some senators were lukewarm on the Duterte government’s second package of the Comprehensive Tax Reform Program (CTRP).
“Ang goal po dito ay to create jobs by attracting the right set of investments through incentives so I think pag nakita naman nila yung new version. Of course, the senators, the Senate can always improve what we’ve worked on. Maybe they will see that this will indeed create more jobs,” he told reporters after his panel approved the tax reform measure, which was also endorsed for plenary discussions and approval.
Cua said under the bill, the investors who expand their business can continue to enjoy their incentives longer than the transition period.
“Hopefully those who are really performing and creating jobs will expand and therefore enjoy longer incentives,” he said.
He also assured that under the measure, the exemptions currently being enjoyed by persons with disabilities (PWDs) will not be scrapped.
“Walang gagalawin sa PWDs, exemptions will remain,” Cua assured. According to the Department of Finance (DoF), PWDs will be given subsidy and vouchers through the tax expenditure fund.