Will TRAIN Package 2 pass in the House and the Senate?
Plaza said TRAIN Package 2 “has created a cloud of uncertainty among PEZA investors.” While the existing ecozone locators are staying put, Plaza said many potential investors, mostly in manufacturing, are putting on hold their plans because of the TRAIN 2. Some are even contemplating of leaving (Ibid.).
Yet as promised by the new Speaker, Gloria Arroyo, the House of Representatives has started to process Package 2. The DoF proposal has come endorsed by eight of the country’s leading economists, who said the “deficiencies” of the current corporate income tax system have hampered the country’s growth and competitiveness — and that maintaining them could make the government miss its long-term vision of transforming the Philippines into a prosperous, high-income economy by 2040 (www.dof.gov.
ph/taxreform July 24, 2018). “We express our support for the main principle of a corporate tax system that is broad-based and competitive relative to our peers in the region. More importantly, lowering the corporate income tax rate will help entrepreneurs and small and medium enterprises thrive. However, in the interest of fiscal prudence, the lowering of rates should be in conjunction with the rationalization of fiscal incentives,” the eight said in their joint statement of support after a discussion lunch hosted by the DoF to vet their Package 2 design.
But at the Senate, no Senator wanted to take the initiative to file the counterpart bill for TRAIN Package 2.
However, last week Senate President Vicente “Tito” Sotto filed Senate Bill 1906 for reforms in the corporate income tax and fiscal incentives in Package 2 of TRAIN.
“It could be good because it would not impose new taxes,” Sotto said. “But we have to be steadfast because some big corporations have started to lobby [against removing incentives]” (The Philippine Star August 1, 2018).
Will TRAIN Package 2 pass in the House and the Senate? Business, the front-line beneficiary (or victim?) of Package 2, holds its breath and (of course) quietly “lobbies” until the final workable form and substance shapes, in the boiling cauldron set upon the political fires of current infighting in the House and the Senate.