MANILA - Finance Secretary Carlos Dominguez III on Friday said the second package of the administration's tax reform is meant to modernize incentives, which have not been changed for a very long time, in order to attract new and growing industries.
Package 2 of the Tax Reform for Acceleration and Inclusion (TRAIN) also aims to lower corporate income tax to 25 percent from 30 percent, Dominguez said on Friday.
"The world is changing and there are many new industries that are developing such as robotics, data analytics and artificial intelligence or machine intelligence," he said.
"We want to modernize it and attract the industries that are going to be growing. We don’t want to be stuck in industries that are sunset industries," he added.
Incentives should be transparent, targeted, time-bound and performance-based, he said. Incentives should attract investments that would create jobs for the country's "young and talented" workforce," he said.
"If a company comes to us and said we want incentives because we will create 1000 jobs, we will give it to them provided they create the 1,000 jobs," Dominguez said.
"We want to make sure that the tax we are foregoing, which comes from your pocket, are given to companies that will improve the economy, not just companies, any company that will come here and not improve the economy," he explained.
Meanwhie, lowering corporate income tax would benefit all companies, Dominguez said, including those who do not receive incentives.
Besides, incentives are just "icing on the cake," he said. The real reason to invest in country is its good labor, market, stable policies and progressive thinking.
- With a report by Michelle Ong