Filipino-Chinese business group backs TRABAHO, substitute bill of TRAIN 2
MANILA, Philippines (Updated 1:16 p.m., Aug. 20, 2018) — A Filipino-Chinese business group has expressed their approval of the proposed Tax Reform for Attracting Better and High-quality Opportunities or TRABAHO bill.
The Federation of Filipino-Chinese Chambers of Commerce and Industry, Inc. said it is in favor of the proposed TRABAHO as the contemplated reduction in corporate income tax rates "would improve the competitiveness of domestic corporations, particularly compared to ASEAN neighbors, and allow domestic firms to reinvest tax savings in their businesses."
"Lower taxes could make businesses pass on the tax savings to consumers by way of lower prices to stay competitive," FFCCII said in a statement Saturday.
FFCCII President Domingo Yap added that the group agrees that rationalization of fiscal incentives reform is long overdue in the Philippines.
"The TRABAHO bill is meant to be revenue neutral and will rationalize granting of government incentives. We reaffirm our support for tax reforms in the TRABAHO bill to sustain fast and inclusive economic growth for the Philippines," he added.
TRABAHO is the substitute bill to the second package of the Tax Reform for Acceleration and Inclusion or TRAIN. It was approved by the House of Representatives' Ways and Means Committee last August 7.
The TRABAHO bill seeks to gradually slash the current 30 percent corporate income tax by 2 percent every other year starting 2021 to 2029, provided that the cut would not reach lower than 20 percent.
The passage of TRAIN 2 was among the legislative priorities President Rodrigo Duterte mentioned in his third State of the Nation Address last July when he urged Congress to pass the bill.
"I hope to sign Package 2 before the year ends. I urge Congress to pass it in a form that satisfies our goals and serves the interests of the many, not just the wealthy few," Duterte said.
Lawmakers, however, expressed apprehension in passing it amid the effects of the first TRAIN package, which exempted those earning an annual taxable income of P250,000 and below from paying the personal income tax and hiked the tax exemption for 13th-month pay and other bonuses to P90,000.
The package also imposed new taxes on diesel, liquefied petroleum gas, kerosene and bunker fuel for electricity generation and higher taxes on other oil products. TRAIN 1 has been blamed for the rising prices of goods. Inflation rose to a fresh five-year high in July at 5.7 percent.
The government, however, points at changes in global oil prices and the weak peso as the reason for the hike in prices of commodities.
Malacañang last month assured that the second package of TRAIN would be different as it would not impose new taxes.
"It will lower the corporate tax so we won't have the highest corporate tax in Asia. TRAIN 2 is different so there is no need to be afraid," presidential spokesman Harry Roque said.
Editor's Note: We have updated the story to reflect a revised version of the release from FFCCII which states their support to the substitute bill of TRAIN 2, the Tax Reform for Attracting Better and High-quality Opportunities. The original version stated that they are in favor of TRAIN 2.
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