DAVAO CITY, Philippines — The proposed second package of the Tax Reform Acceleration and Inclusion (TRAIN) Law is a “social injustice” and only serves the interests of giant corporations at the expense of small and medium-sized enterprises (SMEs), progressive lawmakers lamented on Tuesday.
This as the House of Representatives began its committee hearings into the corporate income taxation measure.
During the first hearing of the House ways and means committee on “TRAIN 2,” ACT Teachers Rep Antonio Tinio said during his interpellation: “Matagal nang puna ng Makabayan bloc ang labis-labis na incentives both tax and non-tax na binibigay sa mga korporasyon. Lumalabas na ngayon ang datos kung gaano karami ang pinamimigay ng gobyerno sa mga kumpanyang ito in terms of tax holidays, etc. Lumalabas rin mula sa DOF (Department of Finance) na ‘di kailangan ang mga ito at lugi ang Pilipinas dito. From incentive ay naging entitlement na at barrier to entry pa nga.”
“Sino ang makikinabang sa TRAIN 2 na ito? The 1st to benefit are local big corporations… Bakit karapat-dapat ibaba ang corporate income tax ng mga dambuhalang ito?” Tinio asked.
“Wag nating gamitin ang kapakanan SMEs para ibaba ang taxes ng mga dambuhala. This is a matter of social justice,” he continued.
TRAIN 2 “protects corporate greed,” said Kabataan Rep. Sarah Elago, adding that the proposed second tranche of TRAIN Law might “cascade (into a) looming financial crisis” in the country.
“The Duterte administration is so obsessed with making a conducive economy for foreign and private investors, it only shows who they truly serve. It is only a matter of time until a financial crisis erupts — and we all know who instigated it: the Duterte administration itself — all at the expense of the poor,” Elago pointed out.
The TRAIN Law which was implemented in January, imposes higher excise taxes on fuel products, cars, tobacco, and sugar-sweetened beverages, but it also increased the tax-free cap of 13th month pay and other bonuses to P90,000, as well as the tax income exemption to P250,000.
TRAIN 2 meanwhile, aims to gradually lower corporate income tax rate from 30 to 25 percent while modernizing incentives for companies.
According to the DOF’s proposal, beginning January 1, 2020, the CIT would be reduced by 1 percentage point for every 0.15 percent of gross domestic product.
The agency also proposed the following specific reforms, among others: