Tax reform makes businesses more competitive, say experts

The proposed tax reform bill of the government will make businesses in the country more competitive, a team of experts said Friday.

During a forum organized by the Chamber of Commerce of the Philippine Islands, Finance Assistant Secretary Maria Teresa Habitan said the additional revenues to be generated from the Tax Reform for Acceleration and Inclusion (TRAIN) Act, which would be used to invest in infrastructure, human capital and health, will positively impact local industries.

“The tax reform package will make Philippine businesses more competitive. Why? Our intention really here is to put the money where it could be really felt in the long term,” Habitan said.

According to the finance official, TRAIN will lead to an improved infrastructure network to support businesses, as well as “better, educated, and healthier” manpower for industries.

Meanwhile, House Ways and Means Committee chairman Dakila Carlo Cua, one of the lead proponents of the TRAIN Act in the House of Representatives, said the bill is ultimately aimed to improve the lives of the Filipinos and enable them to earn more.

He said a middle income economy would mean more disposable income for families and therefore more profits for businesses.

“A working middle class means more business. More disposable income in the family means better profits. In the long run, the market will expand and capital infusion will be attracted to come elsewhere,” Cua said.

Mon Abrea, president of Abrea Consulting Group, agreed with Habitan and Cua, but said the public should also do its part to make the tax reform measures work.

“It is not easy for the government. But each of us can change, if we issue a receipt, ask for receipt, don’t deal with smugglers, and really kill the underground economy by supporting legitimate businesses,” he said.

The TRAIN Act, which is now pending in the Senate,

aims to simplify the country’s tax system by lowering personal income taxes and unifying donor and estate taxes, among others.

To offset the projected revenue loss from the adjustment in the personal income tax, the bill also proposes for the adjustment of fuel and auto- From B1 mobile excise taxes and the expansion of the value-added tax base.

The Department of Finance (DOF) said the measure has gained the support of multiple sectors both locally and abroad.

Among these are industry groups, employers’ organizations, local and foreign busi- ness communities and environmental advocates, among others.

The DOF said multilateral agencies and global institutions, including the World Bank, Asian Development Bank, International Monetary Fund, Fitch Rating, and the United States Agency for International Development, have also backed the bill.