The Palace will inform some senators that they have a misconception on the second package of the administration’s tax reform law hoping to overcome their hesitation about it, an official said Thursday.
Presidential Spokesman Harry Roque said there might be a misconception on the Tax Reform for Acceleration and Inclusion Law amid the reports some senators were lukewarm to it.
“Maybe it is because of a misconception that TRAIN 2 will increase taxes,” Roque said.
“On the contrary, TRAIN 2 will reduce corporate taxes, so, it is not true that the TRAIN will increase the taxes.”
Roque said the second package would only reduce corporate taxation.
He said the Finance department had concluded that the Philippines had a high corporate tax compared to the other Southeast Asian nations.
“It is a matter of telling the senators what TRAIN 2 is and I think we can overcome their initial hesitancy,” Roque said,
He said the Office of the Presidential Legislative Liaison Office would take the initiative.
Senate Majority Leader Juan Miguel Zubiri said no senator wanted to endorse the proposed second package of the TRAIN law.
“It has very little support from my colleagues and, as a matter of fact, no senator wants to sponsor the measure at this time,” Zubiri said.
The Senate leadership also fears package 2 might lead to job loss, less investment and cut some incentives, provoking businesses to pack up and to look for other countries with a high rate of incentives.
Roque, in defense, said Finance had thoroughly studied the measure.
“They [Finance] have shown that incentives do not really affect the decision of the companies on where they will invest,” Roque said.
“What is important for the investors is the stability, predictability, and availability of manpower and infrastructure rather than the incentives.”
Under the proposed second package of the TRAIN law, the government aims to lower the corporate income tax to 25 percent from 30 percent and to modernize the fiscal incentives to attract new and growing industries.
President Rodrigo Duterte had announced during his third State of the Nation Address that the passage of the package 2 was urgent.