MANILA - The House Committee on Ways and Means on Thursday approved "in principle" the second package of tax reforms, which aims to rationalize fiscal incentives and lower corporate income taxes.
Committee Chairman Dakila Cua said House Speaker Gloria Macapagal-Arroyo herself told him to give the bill his "100 percent attention."
The panel is set to convene a technical working group to create a substitute bill that would combine all of the inputs, comments and suggestions gathered after 5 hearings with the Department of Finance, lawmakers and other stakeholders.
Lawmakers and finance officials said they want to make sure the second Tax Reform for Acceleration and Inclusion bill (TRAIN 2) will have no impact on inflation.
The bill aims to remove certain tax perks for industries that are either underperforming or are not part of government’s strategic investment priorities plan.
Savings from the removal of these incentives are expected to offset the lowering of corporate income taxes to 25 percent from 30 percent.
TRAIN 2 is meant to be revenue neutral, meaning it will not result in an increase or decrease of tax collections.
But some lawmakers said it may end up revenue negative, with a lot of sectors lobbying for the retention of their incentives.
Finance Undersecretary Karl Chua and Albay Rep. Joey Salceda said that under their respective proposals, the rate of reduction in corporate income taxes will be dependent on the savings from rationalized incentives.
No savings, no cut in corporate income tax, they said.
Former Finance Secretary Gary Teves meanwhile said companies that would be deprived of incentives should be given a longer transition period so they could adjust to life without tax perks.
Amid this development at the House, Senate President Vicente Sotto III on Thursday filed his version of TRAIN 2 at the Senate.