Businesses are next in line

Revia Mae E. Sibal and Lorrianne Aryenz V. Valdecantos | January 30, 2018

Photo from CNNPhilippines.com

After the basic commodities, businesses are up next on the tax reform program of the administration. Together with the Congress, Department of Finance filed the second Tax Reform for Acceleration and Inclusion (TRAIN) bill with the hopes of passing it this year.

The second phase of the TRAIN law aims to lower the corporate income taxes, but this should match with lower tax incentives.

"Our plan is to initially lower the tax rate for corporations from 30% to 25%. But our proposal to Congress is to allow us to do that only if there is a reduction in the amount that we provide for incentives," Finance Secretary Sonny Dominguez said.

A total of P301 billion was renounced from corporate taxes in 2015 alone.

According to Socioeconomic Planning Secretary Ernesto Pernia, Business Process Outsourcing or BPOs heavily contributes to the decline of the Philippine economy last years, especially it is the times where BPOs are initially slowing down.

BPOs are already on a special consideration, as they are only paying five percent on net income, said Pernia.

There will be investigations according to that and they will see to it that these tax perks will be only given to special sectors of the country, there should also be transparencies in terms of transcripts and reports on how these perks are used.

Pernia stressed that these guys that have been operating for 40 years should have been ready to fly into the real world on their own. Though, they will retain tax incentives, much to be sure that the country gets something in return.

TRAIN 2+ should be getting an update soon, by the end of the month, these updates should cover tobacco, alcohol, mining and gambling. TRAIN 3 should be expected by the end of 2018 on property taxes and reform on investment taxes or TRAIN 4 should be submitted by 2019.