TRAIN 2 not Senate priority, says Zubiri
Senate Majority Leader Juan Miguel Zubiri on Thursday said there was a need to ensure that inflation was going down before tax measures that could adversely affect investments were considered.
Zubiri made the statement as he disclosed that the Tax Reform for Attracting Better and High-quality Opportunities (Trabaho) bill was not among the Senate’s priority measures.
The Trabaho bill, also known as TRAIN (Tax Reform for Acceleration and Inclusion) 2, continues to have little support in the chamber, Zubiri said.
The bill would rationalize the incentives given to businesses and lower the corporate income tax rate.
The TRAIN law, which took effect on Jan. 1, raised the cap for tax-free income but imposed an excise on goods like fuel.
Inflation still high
Speaking at the Kapihan sa Senado forum, Zubiri noted that inflation had just slowed down as it remained at 6.7 percent for the second consecutive month in October. Still it was considered high.
“Hopefully, by next quarter, it would go down. I think we should sustain that momentum where inflation is going down before we come up with new tax measures or tax proposals that would scare off investors or pull out investors from existing companies in the Philippines,” he said.
“What we don’t want to happen is a perfect storm where we have high inflation and loss of jobs,” Zubiri added.
Critics of the Trabaho bill, including business groups, have warned that removing the incentives that investors have been enjoying could prompt them to close shop and transfer to another country.
This could imperil the jobs of thousands of Filipinos, they warned.
Careful study urged
Zubiri urged the Department of Finance to study the bill “very carefully.”
He said he wanted the incentives for investors to remain until such time that the Philippines could afford to lose these.
The senator noted that the country’s neighbors Indonesia and Vietnam were aggressively attracting foreign investors.
The Senate is willing to approve tax reform measures that are not inflationary, such as the one that would allow for tax amnesties, he further said.
With only a few months to go before the 17th Congress ends, Zubiri said there was little chance for the Trabaho bill to hurdle the Senate.
In Malacañang, presidential spokesperson Salvador Panelo on Thursday dismissed as “out of touch with reality” Sen. Francis Pangilinan’s claim that the Duterte administration was not doing anything to tame inflation.
Panelo assured the public that the government had taken steps to curb the effects of inflation.
“We find it unfortunate that Pangilinan is still milking the issue of inflation considering prices have gone down,” Panelo said in a statement.
“Panelo made the remarks following Pangilinan’s statement that the government had not made any concrete moves to temper the effects of the inflation.
Pangilinan reiterated his call to suspend the excise on fuel products, ensure the effective implementation of the unconditional cash transfer program and fix the leadership of the National Food Authority.
Panelo said government economists were not worried about last month’s inflation rate since it had already “plateaued.”
“We are looking forward that it would further ease in the coming months as a result of the steps directly taken by the executive branch to address the rising prices of goods,” he said.
He cited the government’s anti-inflation measures, such as President Duterte’s issuance of Administrative Order No. 13 to streamline procedures on importing agricultural products, and Memorandum Order Nos. 26, 27 and 28 to stabilize the price and supply of agriculture and fishery products.
Panelo said the President was also reviewing the recommendation of the Development Budget Coordination Committee to suspend the excise tax on fuel. —WITH A REPORT FROM JULIE M. AURELIO
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