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Gov’t to fine-tune ‘Trabaho’ bill

The Department of Trade and Industry (DTI) is in talks with the Department of Finance (DOF) to fine-tune some provisions in the so-called “Trabaho” bill, and ensure it would have only “minimal risk.”

Trade and Industry Secretary Ramon Lopez told reporters last week that they both wanted to have a unified approach on the issue, in response to the backlash the tax package had received from various affected agencies and stakeholders.

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This developed as Congress resumes its session today, putting the spotlight again on how the senators would see the Tax Reform for Attracting Better and High-quality Opportunities (Trabaho) bill.

The Trabaho bill seeks to lower the corporate income tax in the country, but at the same time rationalize the incentives offered to investors. The latter part is seen to adversely affect economic zones, many of which house foreign companies that export to other countries.

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“Let’s just say [the talks] are ongoing. We don’t want to discuss the details because that’s really part of the internal government discussions on how we can craft and fine-tune the provisions of the Trabaho bill,” he said.

With a number of senators seeking reelection, it remains to be seen how the warnings of business groups against massive job losses would affect the chances of the tax package being passed this year.

Otherwise, the bill would be delayed, likely dealing a major blow to the Duterte administration’s plans.

Lopez claimed that their talks with the DOF have been going on from the start. He said this conversation came as the government heard comments of the various stakeholders.

However, it was not clear why the DTI only considered to tweak the bill now, especially after it was already passed in the House of Representatives despite the reservations raised by different industries such as the business process outsourcing sector.

Before this, Lopez often dismissed the concerns raised against the bill, even when its own attached agency—the Philippine Economic Zone Authority—had been very vocal about its impact on ecozone locators.

It was the DTI which reached out to DOF to fine-tune the bill and make sure it will only have a “minimal risk,” he said.

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But the DOF would have the final say on whether or not there would even be a compromise, he added.

According to a document seen by reporters, some of these proposed changes included longer tax perks as well as a longer transition period for the 5-percent gross income earned tax.

Lopez said he was still hoping that the bill would be passed this year, noting that it would give new investors certainty over the tax perks to be made available to them.

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