Passage of economic reforms bill pushed
Trade Secretary Ramon Lopez has renewed his appeal to the country’s incoming lawmakers to pass the economic reforms bill liberalizing retail trade and the Tax Reform for Attracting Better and High-Quality Opportunities (Trabaho) bill.
In an interview with reporters in Malacañang, Lopez said the Duterte administration had long been pushing for the passage of these reforms.
Liberalization of industries
“What we’ve been pushing for quite some time now, essentially reforms in the retail trade, reforms in public service by opening up the sector,” he said.
Lopez was in the Palace on Thursday to speak at “The Virtual Presser” which catered to foreign media.
He said that among the crucial legislation they are pushing for pertain to the “liberalization of more industries that will be open to foreign equity—so the retail trade, public service and essentially shortening the foreign negative list, the tax reform package two that will bring down the corporate income tax.”
The bill on retail trade liberalization seeks to open up the retail trade industry to foreign investors.
“We want to lower the $2.5-million investment requirement, capitalization requirement to maybe $200,000. That’s the proposal: below range to serve the Filipinos, above range for the foreign. So at least it will be opened up, then it will allow more foreign investors to come in,” he said.
Lopez also wants amendments to the Commonwealth Law No. 146 or the Public Service Act.
Reforms in public service
The 1987 Constitution dictates that public utilities must be solely operated by firms which are 60-percent owned by Filipinos.
A bill amending the Public Service Act seeks to clearly define what public utilities are and lift foreign ownership restriction on sectors such as the telecommunications industry.
“We’re pushing for reforms in public service by opening up the sector, in other words, to remove them from the foreign investment negative list so that we can attract more investments in these areas,” Lopez said.
The Trabaho bill, on the other hand, wants to gradually reduce corporate income tax to 20 percent by 2029 from the present 30 percent.
Lopez said the Department of Trade and Industry is working with the Department of Finance to possibly smoothen the transition period, especially for existing exporters in the ecozones.
“When we say smoothen the transition, if we are to put them on a time-bound basis, we just have to manage the transition. In other words, prolong the time-bound deadline of those incentives that they now enjoy—this is just for the existing— or probably agree to a higher gross income earned rate. Right now, they are at 5 percent and we can just say grandfather rule: In other words, all those who are enjoying will continue to enjoy but must pay a little more; and I think we are gaining acceptance on that alternative,” he said.
He also assured that the economic reforms can be passed into law without changing the 1987 Constitution.
“Ah yes, without Charter change. It’s a retail trade law—a law. Not Charter change,” Lopez added.
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