A watered-down version of TRAIN 2?
In a bid to make it more acceptable to his fellow senators, Senate President Vicente Sotto III has created a version that took out the provision that removes the incentives being enjoyed by locators at the country’s economic zones.
“Sa version ko, inalis ko ang probisyon na tinatanggal ang tax incentives sa mga economic zones kasi hindi maganda feedback tungkol dun,” Sotto said in a radio interview.
The TRAIN 2 seeks to lower the corporate income tax from the current 30 percent to 25 percent, while rationalizing fiscal incentives to plug revenue leakages, including tax incentives on economic zones.
The Department of Finance version of TRAIN 2, which it submitted to Congress last January, proposed to plug leakages such as tax holidays and incentives with no time limits which costs the government over P300 billion yearly in foregone revenues.
The DOF also wanted to remove the 5-percent tax on gross income currently being enjoyed by economic zone investors.
Sotto said the tax incentives should be retained as it might discourage investors and push them to invest in other countries instead.
“The important thing is we discuss it in the committee level ng mga senador ilagay pag-usapan ang mga nasa isip nila kesa naman ‘di namin pag-usapan at makinig na lang kami sa mga sinasabi ng mga nagbabasa nito. Maganda na rin na mapag-usapan ang nilalaman ni Tito,” the Senate President said.
Despite opposition from some senators, Sotto filed a bill on Thursday pushing for the second package of tax reforms proposed by the DOF.
Only a week earlier, Sotto and the majority of senators were not inclined to support TRAIN 2, after the country’s economic managers failed to fulfill the promises they vowed to do during the deliberations for TRAIN 1.
“Kung talagang maganda ang laman at tama ang suspetsa ko na makikinabang ang maliliit like sa MSMEs may pag asa yan. Pero kung yung ibang parte run na di pa naming masyadong nakikita biglang may lilito na makakasama ay mahihirapan,” Sotto said.