MANILA, Philippines–The House of Representatives on Friday passed on third and final reading the second tranche of the government’s tax reform package aimed at generating more jobs by reducing corporate taxes and rationalizing fiscal incentives.
By a 170-8 vote with six abstentions, the lower chamber approved House Bill No. 4157, or the proposed Corporate Income Tax and Incentive Rationalization Act (Citira) during a break in the House deliberations on the proposed 2020 budget.
The bill seeks to lower the corporate income tax (CIT) from 30 percent to 20 percent over a period of 10 years, as well as to rationalize the tax incentive system.
‘Advantageous to rich’
But critics described the measure as heavily advantageous for the rich and a terrible followup to the Tax Reform for Acceleration and Inclusion (TRAIN) Act, which was blamed for last year’s soaring inflation.
“The Citira bill is a classic example of how skewed the Philippine tax system is against the poor,” Albay Rep. Edcel Lagman said, explaining his no vote.
“No less than the sponsoring committee admitted that the government is going to forfeit a trillion pesos in 10 years in foregone revenues,” he said, referring to the House ways and means panel.
The bill’s sponsor, according to Lagman, “also admitted that due to corruption, tax evasion, tax avoidance and tax incentives, the effective corporate income tax is much lower than the current 30 percent. The reduction of the CIT rate will further exacerbate the effective tax rate.”