TRABAHO bill ensures better incentives for well-performing investors —DOF

The Department of Finance on Thursday said that better incentives await well-performing foreign investors if the second package of the comprehensive tax reform program is enacted.

The tax reform bill, recently approved and named by the House of Representatives as the Tax Reform for Attracting Better and High-quality Opportunities (TRABAHO) bill, aims to make tax perks time-bound, transparent, targeted and performance-based for a more competitive fiscal incentives system.

“The government is pro-investment, pro-jobs and pro-incentives,” Finance Undersecretary Karl Kendrick Chua said.

“We will continue to give incentives to those that perform. But we will start to include sunset provisions on the incentives of those that are not performing. So what is there to fear if you are performing, if you are contributing exports, contributing to countryside development, jobs and productivity?” he added.

‘Better set of incentives’

The Finance Department has labeled the current fiscal incentives system as “inequitable and convoluted” and assured that a new set of incentives that comes with the proposed reform will be better.

“For instance, you can avail of the 50 percent more deduction on labor; 100 percent more deduction on training, on research and development; 50 percent more deduction if you buy local. And then the depreciation allowance is even better, and there is a longer net operating loss carryover,” Chua said.

‘Level the playing field’

The TRABAHO bill primarily aims to lower the 30 percent corporate income tax to 20 percent by 2029.

This tax reform seeks to level the playing field for the 90,000 active small and medium enterprises (SMEs) that do not enjoy the tax perks only vested in a select group of corporations, the DOF said.

“What we are basically doing is to make our incentives more accountable, fairer, and, at the same time, give the same opportunity to some 90,000 SMEs that are also working hard, also delivering jobs and exports and productivity but paying the regular 30 percent. That is really what this whole reform is all about,” Chua said. —Dona Magsino/VDS, GMA News