DOF chief urges swift passage of TRABAHO bill in Congress

MANILA, Philippines — The Department of Finance (DOF) has once again called on Congress to swiftly pass the second package of the Comprehensive Tax Reform Program (CTRP), urging lawmakers to consider the interest of the business community.

In an interview, Finance Secretary Carlos Dominguez reiterated the importance of passing the Tax Reform for Attracting Better and High-Quality Opportunities (TRABAHO) bill in Congress, citing its benefits especially to micro, small and medium enterprises (MSMEs) who make up majority of the country’s business community.

“If they think about it, it’s actually good. Can you imagine, you are giving a tax break, which is like a tax incentive, to 99 percent of the corporations in the Philippines. By reducing the corporate income tax (CIT) from 30 percent down to 25 percent, that is a big incentive for the people,” Dominguez said. 

“If they think about it that way, they should be able to pass it in a flash,” he said.

However, Dominguez said a few sectors have been loud in their opposition against the tax reform measure, given that it also seeks to rationalize the grant of fiscal incentives.

“Now, it’s really a question of who the legislators are going to listen to: the vast majority of Filipino companies or a few foreign companies?” he said.

Dominguez said parties who oppose the measure “are holding hostage an entire business community for the interest of a few, which are not even sure that they will be affected badly, only that they will have to follow the rules that are applicable elsewhere in the world.”

He said the second CTRP package seeks to make fiscal incentives time-bound, transparent, targeted and performance-based.

“That’s all we want, we’re not going to squeeze anybody. This is a big benefit for the business community,” he said.

Package 2 of the CTRP, as contained in the TRABAHO bill, seeks to reduce the country’s CIT rate while rationalizing fiscal incentives.

This bill, together with some three more tax reform measures already passed the scrutiny of the House of Representatives and are pending in the Senate.

These include Package 2 Plus, which includes a bill on the mining fiscal regime, Package 3 on property valuation, and Package 4, which aims to rationalize the tax system on capital income and financial instruments.