Eight well-known economists urged Congress to pass the corporate tax reform bill to help fulfill the government’s goal of making the country’s taxation system simpler, fairer and more efficient.
The economists said in a statement the “deficiencies” of the current corporate income tax system had hampered the country’s growth and competitiveness”•and that maintaining them could make the government miss its long-term vision of transforming the Philippines into a prosperous, high-income economy by 2040.
The statement was signed by former Finance Undersecretary Romeo Bernardo; Prof. Dante Canlas of the UP School of Economics; Gerardo Sicat, the first director-general of National Economic and Development Authority; Gilberto Llanto, former president of the Philippine Institute of Development Studies; Renato Reside Jr., assistant professor of the UP School of Economics; Monetary Board member Prof. Felipe Medalla; Monetary Board member Bruce Tolentino; and Arsenio Balisacan, chairperson of the Philippine Competition Commission and former Neda director-general.
The economists lauded the efforts of the Finance and Trade Departments to modernize the corporate income tax system as part of the Duterte administration’s objective of making tax policy reform “a key pillar of socioeconomic policy and tool for fair and inclusive growth.”
The proposals of the DoF and DTI to overhaul the corporate tax system are contained in Package 2 of the Duterte administration’s comprehensive tax reform program.
“As Congress deliberates on the second package of the reform, we express our support for the main principle of a corporate tax system that is broad-based and competitive relative to our peers in the region. More importantly, lowering the corporate income tax rate will help entrepreneurs and small and medium enterprises thrive. However, in the interest of fiscal prudence, the lowering of rates should be in conjunction with the rationalization of fiscal incentives,” the economists said in a joint statement of support.
They said that tax incentives are given to businesses “are public investments and that their benefits should accrue to the Filipino people.”
“We stand with the Department of Finance and the Department of Trade and Industry that tax incentives should be performance-based, time-bound, targeted, and transparent,” they said.
The House of Representatives is set to deliberate on the corporate tax reform bill beginning this week.