The Philippines Department of Finance (DOF) has announced on 25 April 2019 that the second package (Tax Reform for Attracting Better and High-Quality Opportunities or TRABAHO) of the Duterte administration’s Comprehensive Tax Reform Program (CTRP) currently pending in the congress that aims to reduce corporate income tax (CIT) and rationalize fiscal incentives, especially for micro, small and medium enterprises (MSMEs) that account for more than 99 percent of local businesses and 63 percent of jobs.
This was based on the results of independent, third-party surveys conducted during the series of ‘Sulong Pilipinas’ forums organized by the government and held in key cities in the country last November 2018 and the surveys showed that 91% of MSMEs support the bill. A select group of big firms, many of them in the country’s list of Top 1000 corporations, which have enjoyed discounted corporate rates of 6% to 13%, have opposed the move to explain fiscal incentives.
Dominguez (Secretary of Finance under President Rodrigo Duterte) said that CIT would gradually be reduced from 30 percent to 20 percent to bring the Philippines closer to the regional average. He also said that these measures would bring a more modern tax system conducive to investments.
Philippines Department of Finance is hopeful that the tax reform package will be approved in the upcoming months.
