MANILA - Malacañang on Monday said it seems that several lawmakers seem to be apprehensive on passing the second tranche of tax reforms a year before the elections.
Senators appeared to be cold to sponsoring the second package of the Tax Reform for Acceleration and Inclusion after the first package, which raised duties on sugar-sweetened drinks, fuel and cars, was blamed for the fast inflation.
Presidential Spokesperson Harry Roque said the “misconception” of the senators about TRAIN 2 should be corrected.
“Of course it’s an election year. So natatakot siyempre kung sino man ang tatakbo sa eleksyon, lalo na ang mga reeleksiyonista, on the passing of the tax bill,” Roque said in a press briefing.
(Of course it’s an election year. Some of them, especially the reelectionists, are afraid of passing a tax bill.)
TRAIN 2 aims to lower corporate income tax from 30% to 25% and modernize incentives in order to attract new and growing industries.
The Philippines currently has one of the highest corporate income taxes in the Southeast Asian region.
Senate Majority Leader Juan Miguel Zubiri said last week that chances of TRAIN 2 getting the Senate's approval is slim.
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.
Finance Assistant Secretary Tony Lambino, meanwhile, has said 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 press briefing last week.
In his State of the Nation Address Monday, Duterte said he hoped to sign the second tranche of tax reforms 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.”