Corporate Tax Cut Plan Before Filipino Lawmakers
Filipino Finance Secretary Carlos Dominguez has called on lawmakers to pass a package of tax measures, including a cut to the corporate tax rate and a reduction in tax breaks and holidays.
Package 2 of the Government’s comprehensive tax reform program, which is currently being debated in parliament, would gradually lower the corporate income tax rate from 30 to 25 percent.
It would also rationalize the country’s complicated system of tax incentives. Currently, the country has 14 investment promotion agencies and there are 123 laws outside the tax code that grant various forms of investment incentives and 210 laws that grant non-investment incentives.
Dominguez explained that the corporate tax rate cut must be combined with a reduction in tax incentives.
Other reforms are being considered separately, including to the tax rules for companies operating in a special economic zone. These entities pay a five percent tax on gross income, in lieu of other taxes. It is proposed that this should be replaced with a 15 percent tax on net taxable income. Existing income-based incentives and tax holidays would be maintained.
Dominguez said his Ministry is also looking to further reform VAT and to discontinue granting indefinite local tax exemptions to investors.
The first package of tax reforms, enacted late last year, cut personal income tax rates while raising additional revenues through the repeal of several value-added tax exemptions. It also adjusted excise tax rates for fuel, coal, and automobiles and introduced a tax on sugary beverages.
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Source:Tax News
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