MANILA - Malacañang on Thursday said it hopes it can “overcome” the apprehensions of some senators over the second package of the administration's tax reform.
Presidential Spokesperson Harry Roque said there was a “misconception” among senators that the second package of the Tax Reform for Acceleration and Inclusion (TRAIN) would increase taxes.
TRAIN 2 aims to lower corporate income tax from 30% to 25% and modernize incentives in order to attract new and growing industries.
The government wants to reduce corporate income tax to attract more investments, as the Philippines currently has one of the highest corporate income taxes in the Southeast Asian region.
“I think it’s a matter of telling the senators what TRAIN 2 is and I think we can overcome their initial hesitancy,” Roque said in a press briefing in Zamboanga Sibugay.
Senate Majority Leader Juan Miguel Zubiri said last Tuesday that chances of TRAIN 2 getting the Senate's approval is slim.
Zubiri said neither the minority nor majority bloc members have sponsored the President’s tax reform law. He will not sponsor nor support it also, he added.
The senator said a new tax law directed at the business sector would definitely shoo them away that would surely result in more job losses.
"The fact is a lot of businesses and industries have already complained to us that they are looking to take up shop elsewhere. Sabi nila pag matatanggal incentives nila, lipat sila ng Vietnam. I also have my serious reservations on TRAIN 2,” Zubiri said.
Roque said the finance department has studied the matter intensively and found that more than the incentives, investors place more importance on stability, predictability, and availability of manpower and infrastructure.
Finance Assistant Secretary Tony Lambino, meanwhile, said in a Palace briefing on Wednesday that TRAIN 2 “is worth the time and effort.”
“We have the highest tax rate in ASEAN region at 30%, we would like to bring it down to 25, possibly 20, if we can even push it down that far. At the same time, we want to re-orient our incentives programs, so that we are oriented toward the industries of the future… in robotics and aerospace and in other areas that the Board of Investments will identify as a strategic investment area for the country,” Lambino said.
In his State of the Nation Address Monday, Duterte said he hoped to sign the second tranche into law before the end of the year, urging Congress to “pass it in a form that satisfies our goals and serves the interests of the many, not just the wealthy few.”
Apprehensions over TRAIN 2 partly stem from criticism against the first package of government’s tax reform program, which raised duties on sugar-sweetened drinks, fuel and cars, will only do more harm than good.