DBM urges Congress to review TRABAHO bill

One of President Rodrigo R. Duterte’s economic managers warned that the House committee approved second tax reform measure has a serious fiscal concern that needs to be reviewed by the lawmakers.

In a briefing, Department of Budget (DBM) Secretary Benjamin E. Diokno said yesterday that Congress should be open to revisiting the revenue impact of the unnumbered tax reform for attracting better and highquality opportunities (TRABAHO) bill.

Diokno said the bill, which is the second tranche of the President Duterte’s comprehensive tax reform program (CTRP), is estimated to have a revenue loss of 162 billion, a sizeable amount that warrants reconsideration.

“That is a serious fiscal breach,” Diokno said when asked if the economic team is amenable to second tax reform bill approved by House Committee on Ways and Means. “It could result in higher deficit which we find at this time, we don't what that to happen.”

Under the TRABAHO bill, it will lower the corporate income tax rates and rationalize fiscal incentives.

From the current 30-percent corporate income tax rate, it proposes to reduce the levy without conditions to 28 percent beginning January 1, 2021; 26 percent the following year; 24 percent in 2025; 22 percent starting 2027; and 20 percent beginning 2029.

The bill also provides that the President may advance the scheduled reduction in the corporate income tax rate when adequate savings are realized from the rationalization of fiscal incentives, as certified by the Finance Secretary.

With the absence of the “conditions” before cutting down the corporate income tax rates, Finance Undersecretary Karl Kendrick T. Chua warned this would result in 162 billion in revenue losses.

Diokno believes the huge estimated revenue losses is unacceptable, but he assured the administration will continue to work with Congress to come up with an mutually acceptable proposal.

“It is supposed to be revenue natural. I think it’s a step forward, but we’re not sure if that will stick. We cannot dictate on the House or the Senate on that matter. We will try to convince them to try to make it at least revenue neutral,” Diokno said.

Rep. Dakila Carlo Cua, who chairs the House ways and means committee, said the bill will be called the “TRABAHO bill” because the measure is expected to create jobs, especially in the countryside.

He also expressed hope that the Senate would give the measure a chance as some senators appeared lukewarm on the government’s second tax reform package.