In a statement on Tuesday, the Department of Finance said it has formally submitted CTRP’s package two to the House of Representatives last January 15 — the day lawmakers resumed the second regular session of Congress following its yearend recess. TOTO LOZANO/Presidential Photo

DOF submits Package 2 of Tax Reform Program to Congress
Ian Nicolas Cigaral (philstar.com) - January 16, 2018 - 6:00pm

MANILA, Philippines — The second package of the Duterte administration’s Comprehensive Tax Reform Program (CTRP) that seeks to attract more investors by reducing corporate income tax rates, among others, has entered the legislature.

In a statement on Tuesday, the Department of Finance said it has formally submitted CTRP’s package two to the House of Representatives last January 15 — the day lawmakers resumed the second regular session of Congress following its yearend recess.

The second tranche of the CTRP proposes gradual lowering of corporate income tax rates from 30 to 25 percent.

It also seeks to “modernize” and “correct” the incentives enjoyed mostly by big businesses, such as income tax holidays and other perks with no time limits.

The measure was designed to be revenue-neutral. The DOF earlier said the cuts in corporate income tax rate will be offset by “enough claw back of incentives.”

Compared to other economies in Southeast Asia, the Philippines imposes the highest corporate income tax rate, but is among those at the bottom in terms of collection efficiency, the DOF said.

A “flawed and outdated” system that provides tax incentives to companies is the reason for the country’s low collection of corporate income taxes, it added.

Citing 2015 data, the DOF said income tax holidays and special rates accounted for P86.25 billion of revenue losses, while custom duty exemptions account for P18.4 billion. 

“So on average, we gave away up to 2 percent of our GDP (gross domestic product) in income tax and custom duties exemptions,” Finance Undersecretary Karl Kendrick Chua said. 

On December 19, President Rodrigo Duterte signed into law the CTRP’s first package, or the Tax Reform for Acceleration and Inclusion (TRAIN) Act, which aims to generate revenue to fund a multi-billion dollar infrastructure program key to the government's economic agenda.

EXPLAINER: How Duterte's new tax law or TRAIN can affect you

Under the TRAIN law, personal income tax rates will be adjusted to shift the burden off lower-income segments toward the “ultra-rich.”

Meanwhile, projected revenues to be foregone from lower personal income tax will be offset by higher excise levies on petroleum and automobiles, among others.

The DOF earlier said the three other tax reform packages will involve property taxation, capital income taxation, as well as health, environment and luxury taxation.

READ: DOF lists priority legislative bills for 2018

DEPARTMENT OF FINANCE HOUSE OF REPRESENTATIVES TAX REFORM
Philstar
Facebook
  • Latest
  • Trending
Latest
Are you sure you want to log out?
X
Login

Philstar.com is one of the most vibrant, opinionated, discerning communities of readers on cyberspace. With your meaningful insights, help shape the stories that can shape the country. Sign up now!

SIGN IN
or sign in with
Read and share the latest news
whenever and wherever you are.
Top Stories
Features the most relevant stories,
exclusive content, analyses and special reports.
As It Happens
Get bite-sized highlights and up-to-date
information as the news breaks.
Latest
View the most recent
stories of the day.
Log-in
Lorem ipsum dolor sit amet,
consectetur adipiscing elit.
Quisque justo est, auctor vel ullamcorper.
Log-in
Lorem ipsum dolor sit amet,
consectetur adipiscing elit.
Quisque justo est, auctor vel ullamcorper.
How to follow As It Happens stories
STEP 1
Click the story in the As it Happens section.
How to follow As It Happens stories
STEP 2
Click "Follow Story" for updates on the news.
Lorem ipsum dolor sit amet, consectetur adipiscing elit. Aliquam eu metus vitae felis tincidunt finibus ut id sapien. Integer volutpat dui eu malesuada dignissim. Sed varius justo nulla, fringilla convallis sem porta sed.
How to follow Author
STEP 1
Click on the author's name in the article.
How to follow Author
STEP 2
Once you click on the author's name, you will be
brought to the Authors page. Click "Follow Author"
to stay updated on the author's works
Lorem ipsum dolor sit amet, consectetur adipiscing elit. Aliquam eu metus vitae felis tincidunt finibus ut id sapien. Integer volutpat dui eu malesuada dignissim. Sed varius justo nulla, fringilla convallis sem porta sed.
How to follow Tags
STEP 1
Click on a tag in the article.
How to follow Tags
STEP 2
When you click on a tag, it will take you to the
dedicated tag page where you'll see the article
viewed, along with other stories with that tag.

Click the "follow tag" button to stay updated on
the topic.
Lorem ipsum dolor sit amet, consectetur adipiscing elit. Aliquam eu metus vitae felis tincidunt finibus ut id sapien. Integer volutpat dui eu malesuada dignissim. Sed varius justo nulla, fringilla convallis sem porta sed.