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DOF: SMEs support Trabaho bill

/ 05:30 AM November 24, 2018

Small and medium enterprises (SMEs) in Luzon and Visayas have backed moves in Congress to reduce the corporate income tax and rationalize fiscal incentives enjoyed by investors, the Department of Finance (DOF) said Friday.

In a statement, the DOF said SMEs would expand their operations, raise their workers’ salaries and hire more employees if the second tax reform package, or the proposed Tax Reform for Attracting Better and High-quality Opportunities (Trabaho) bill passed muster.

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The Trabaho bill will slash the corporate income tax rate to 20 percent from 30 percent at present, the highest in Asean.

About 90,000 SMEs and over 100,000 microenterprises pay high taxes, DOF data showed.

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During the recent Sulong Pilipinas consultative workshops held in Cebu City and San Fernando, La Union, the regional governors of the Philippine Chamber of Commerce and Industry (PCCI) in Regions 1 and 7, respectively, expressed support for the Trabaho bill, the DOF said.

“With regard to the Trabaho bill, we support the lowering of corporate income taxes. Savings from lower corporate income taxes will allow us to hire more workers, increase wages and expand our businesses,” PCCI Region 7 governor Edward Du was quoted by the DOF as saying.

Du and PCCI Region 1 governor Alexander Ang also “[backed] reforms to further improve the ease of doing business (EODB), especially the zero-contact policy provided under the EODB Law, which will create the most significant positive impact,” the DOF added.

Earlier, Finance Secretary Carlos Dominguez III said “the new targeted, time-bound, performance-based and transparent set of incentives under [the Trabaho bill] will include perks such as more tax deductions for firms hiring more workers, and longer tax holidays for those that would set up shop in areas outside Metro Manila, especially in post-conflict and post-calamity areas.”

Also, the second package of the Duterte administration’s comprehensive tax reform program would “allow additional tax deductions in incremental spending on labor, research and development, reinvestment in manufacturing and domestic input expense, among other factors,” according to the DOF. —BEN O. DE VERA

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TAGS: ‘trabaho’ bill, corporate income tax, Department of Finance (DOF), small and medium enterprises
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