MANILA—A congressional committee approved on Wednesday a bill that aims to lower corporate income taxes and rationalize fiscal incentives.
The House Committee on Ways and Means approved House Bill 176, also known as Tax Reform for Attracting Better and High-quality Opportunities or TRABAHO Bill.
The measure proposes to slash the country's corporate income tax (CIT) rate from 30 percent to 20 percent, and make up for the lost revenues by restructuring the tax perks given to certain companies.
Under the measure, the corporate tax rate will be cut by 2 percent every 2 years starting January 2021, until it reaches 20 percent by January 2029.
"Ina-adjust natin 'yung CIT kasi it is a clear and present danger to the competitiveness of the Philippines. Other countries have been bringing down their corporate income tax," said Albay Rep. Joey Salceda, who chairs the House panel.
Tax perks, meanwhile, will be granted for a maximum of 5 years, thus removing the perpetual 5-percent tax on gross income earned, and limiting income-tax holidays.
Investors and locators can reapply when their incentives period have lapsed.
The bill also lists 12 incentives that can be granted, among which are an income tax holiday, and a reduction of the corporate tax to 18 percent.
The measure also allows the President to grant incentives if the project has a comprehensive sustainable development plan and will bring in at least $200 million.