Senator, citing polls, casts doubt on TRABAHO bill passing by end-2018

A SENATOR said the second phase of tax reform, known as the Tax Reform for Attracting Better and High-quality Opportunities (TRABAHO) bill may face obstacles that will hinder its approval before the end of the year because of the upcoming elections.

“I’m not so optimistic that it will be approved within the year,” Senator Sherwin T. Gatchalian said in an interview in Manila City when asked if the Senate can pass the bill within the year, in time for its provisions to take effect in 2019.

“Next year is election year, [which makes things] even worse. It’s hard to pass tax reform in an election year, especially when there is a risk of job losses,” added Mr. Gatchalian, who chairs the Senate’s Economic Affairs Committee.

Half of the Senate is subject to reelection to another six-year term.

The Senate suspended its review of the bill due to the lack of information on potential job losses.

Business groups have cautioned that the bill’s proposal to remove some investment incentives will lead to downsizing.

The bill sets aside P45 billion for a five-year structural adjustment fund that will be distributed as cash grants and will fund training for displaced workers of affected firms and industries.

“The ball is in the court of (the labor and finance departments). We’re giving them a reasonable amount of time to submit the required paperwork. It is important to have a simulation of potential job losses because ( job losses are) not the intention of the bill. Just look at the name of the bill,” he added.

Mr. Gatchalian is hoping for the jobs report to be made available to the Senate once it convenes on Nov. 12.

The TRABAHO bill seeks to reduce the corporate income tax rate gradually from 30% currently to 20% by 2029 while repealing redundant incentives and limiting their enjoyment to a maximum of five years to industries identified in the Strategic Investments Priority Plan.

The House of Representatives approved the TRABAHO bill, or House Bill No. 8083, on final reading in September, while the Senate has yet to come up with a committee report. —