'High performing' firms need not worry over taxes under DTI proposal: Lopez

ABS-CBN News

Posted at Sep 11 2018 09:21 AM | Updated as of Sep 11 2018 09:29 AM

'High performing' firms need not worry over taxes under DTI proposal: Lopez 1
The Fort Bonifacio business district skyline is shown in this file photo. Jonathan Cellona, ABS-CBN News

MANILA -- "High performing" companies can still enjoy low tax rates under the Department of Trade and Industry's proposed input in the second round of tax reforms, Secretary Ramon Lopez said Tuesday.

Firms that export 90 to 100 percent of their output, generate "a lot" of jobs and manufacture "new products," can avail of a 15-percent tax on their net income under the DTI's proposal, which is "being worked on," Lopez said.

The 15-percent tax on net income is equivalent to the current 5-percent tax on gross, Lopez said, adding the firms must meet the proposed benchmarks every year.

The TRABAHO Bill, which also seeks to gradually lower the corporate income tax rate to 20 percent from 30 percent, was recently passed on third and final reading at the House of Representatives.

"What we're saying is, it has to be time-bound," Lopez told ANC's Headstart. Some incentives that the government wants to rationalize are "perpetual," he said.

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Lopez addressed concerns by Japanese investors on the Tax Reform for Attracting Better and High Quality Opportunities or TRABAHO bill, which was reported by Japan's leading new agency, Kyodo.

"What we're saying to these Japanese companies, if they're high performing (exporting) 90 percent and above, they have nothing to worry about," Lopez said.

The government is pushing for a "much better, more relevant" incentives package, he said.

The first tranche of reforms, dubbed Tax Reform for Acceleration and Inclusion or TRAIN, raised taxes on fuel, cars and sugar-sweetened drinks to offset a reduction in personal income tax rates.