MANILA - The Department of Finance (DOF) on Monday denied that the second package of the tax reform program will lead to the cancellation of all fiscal incentives.
Finance Assistant Secretary Paola Alvarez said that the proposed tax reforms have "provisions for new incentives for current players that expand their businesses or adopt new technology" as well as "a reasonable period" on when the incentives expire.
Package 2 of the Tax Reform for Acceleration and Inclusion (TRAIN) aims to lower corporate income taxes to 25 percent from 30 percent, and "modernize" fiscal incentives.
“At present, there are more than 100 special laws that result in an overly complex corporate tax system, impose a large administrative burden for the government and taxpayers, and give special treatment to a small minority of corporations that pays 6 percent to 13 percent, in contrast with the 30 percent tax rate the vast majority has to cover," Alvarez said.
She added that at 30 percent, the Philippines has the highest corporate taxes in Southeast Asia where rates range from 20 percent to 25 percent.
Alvarez said that tax incentives are neither the best way nor the only way to help the industry as they often result in large leakages.
The DOF has said that second package of TRAIN will not lead to higher revenues but will attract new and growing industries.