TRABAHO Bill to create more jobs – Bello

Labor and Employment Secretary Silvestre Bello III said that removing unnecessary incentives under the second package of the comprehensive tax reform program (CTRP) or the proposed TRABAHO Bill will not lead to massive job losses, contrary to claims.

The Tax Reform for Attracting Better and Highquality Opportunities Act. (TRABAHO) Bill seeks to overhaul the current corporate taxation and fiscal incentives regime to sharpen the competitiveness of small and medium-sized businesses and create more jobs, especially in the countryside.

Bello believes the excessive perks and the few firms currently enjoying them will remain profitable.

“As a result of the significant reduction in the corporate income tax (CIT) rate that will free up more capital for firms to invest and, in turn, create jobs, the DOLE expects this tax reform to spur employment opportunities especially in the countryside,” Bello said.

“Package 2 is a positive impact on the economy that will make smaller firms more competitive and will allow them to expand faster,” he added.

Some 90,000 active small and medium enterprises (SMEs) and more than a hundred thousand micro enterprises that pay the regular corporate income tax (CIT) rate of 30 percent, which is the highest in the region, stand to benefit from Package 2.

The DOF is pushing the congressional approval of a measure rationalizing incentives for corporations because under the now-convoluted system, a select group of mostly big firms enjoy tax breaks plus other perks that let them pay discounted rates of between 6 and 13 percent, while the rest pay the regular CIT.

Finance Secretary Carlos Dominguez III said "the Duterte administration wants to level the playing field for SMEs under the current corporate tax system in which more than 300 laws enable a favored group of large enterprises — many of them on the list of the country’s Top 1,000 corporations — to pay the discounted rate."