MANILA, Philippines — The Tax Management Association of the Philippines (TMAP) urges the government to further study the tax incentives scheme proposed under the Tax Reform for Attracting Better and Higher Quality Opportunities (TRABAHO) bill.
In an interview with reporters, TMAP president Eleanor Roque said the government must ensure the fiscal incentive reforms being pushed under the bill would not be detrimental to the Philippines’ competitiveness as an investment destination.
“Our call is to further study it because the way TRABAHO bill was crafted before, the incentives really became limited to five years. Our call is to look at the incentives given within the region and see whether we can still be competitive,” Roque said.
According to Roque, the government must benchmark its incentives system with those implemented in other countries in the region.
“Compare it with other countries, especially our competitors Indonesia, Vietnam, Malaysia, and Thailand. Some of them have still 10 to 15 years, some of them still have indefinite period depending on where the investment is. So maybe we should align ourselves with them,” Roque said, adding that “if we will shorten it to five years, we might have a hard time.”
The Department of Finance (DOF) earlier said it may refile the second package of the Comprehensive Tax Reform Program for the approval of the 18th Congress.
The bill seeks to reduce the country’s corporate income tax rate, while rationalizing fiscal incentives.
According to Roque, a number of foreign investors and companies are currently on a wait-and-see status pending the passage of the bill.
“We’ve seen some of the position papers of the foreign chambers, they’re saying that they’ll really study. Depending on what will be passed, they might no longer invest here or they’d move out. I think a lot of the investors and companies here are on a wait-and-see status,” she said.
Meanwhile, Roque said taxpayers are still hopeful for the approval of the General Tax Amnesty Program in the 18th Congress.
The program was earlier vetoed by President Duterte before passing Republic Act 11213 as it lacked the provisions on the relaxation of the Bank Secrecy Law and the automatic exchange of information.
“We’re supportive of the DOF requirement, the lifting of the bank secrecy and the automatic exchange of information. We know that those are crucial legislation and those are our international commitments,” Roque said.