CORPORATE TAX REFORM TO CREATE 1.4-M JOBS
The proposed staggered cuts in the CIT will energize hundreds of thousands of SMEs
The Duterte administration’s tax reform package that aims to lower the corporate income tax (CIT) and overhaul the country’s “convoluted” fiscal incentives system is projected to generate some 1.4 million jobs, mostly in small and medium enterprises (SMEs), over the next decade and create a business environment conducive to inclusive growth, according to Finance Secretary Carlos Dominguez III.
Dominguez said at a business forum that the proposed staggered cuts in the CIT from 30 to 20 percent over a 10-year period as provided under the Tax Reform for Attracting Better and High-Quality Opportunities (Trabaho) bill will energize hundreds of thousands of SMEs and encourage them to use part of their saving from lower tax payments to expand their businesses and hire more workers.
“We urge the business community to thoroughly read the measure, rather than base their positions on hearsay and opinions of uninformed people, so that you can work with the government in explaining the true benefits of the Trabaho bill to the public,” Dominguez said at the event organized by businessman Peter Wallace held Thursday at the Makati Shangri-La Hotel.
Dominguez said contrary to the perception poised by this proposed tax reform’s critics, the Duterte administration’s plan will not eliminate incentives for investors but would even improve them by offering a better set of perks that includes the following: 50 percent deduction on incremental labor costs; 100 percent deduction on training, research and development; and 50 percent deduction on purchases of local raw materials.