Senate President Vicente “Tito” Sotto III filed on Thursday the second package of the government’s tax reforms program.
The proposal is contained in an 87-page Senate Bill No. 1906 entitled the “Corporate Income Tax and Incentives Reform Act,” which seeks, among others, to lower the corporate income tax from the current 30 percent to 25 percent.
The bill that Sotto earlier promised to file, also expands the tax base by repealing 123 special laws on investment tax incentives.
Sotto pointed out, however, that existing investment tax incentives would be “rationalized” only but would not be removed.
“For the past two to three decades, there are 654 firms enjoying incentives from the government,” he said in the explanatory note of the bill.
“Thus, it is high time to have tax incentives that are performance-based, targeted, transparent, and time-bound in order to ensure that the Filipino people will gain from every peso that the government gives to firms registered in the promotion agencies,” the senator said.
The bill, he said, would also simplify the tax system to avoid tax evasion by providing higher penalties to offenders.
“Considering that this is a revenue neutral tax measure, it will not have any inflationary effects but it may one way or another provide support to some 90,000 plus SMEs to be covered by this Act,” Sotto said.
The Senate leader urged his colleagues to support the urgent passage of the measure.
Last January, the government implemented the first package of its tax reforms — the Tax Reform for Acceleration and Inclusion (TRAIN).
The new law, however, was blamed for the rising prices of basic commodities, power, and food. /vvp