Budget secretary Benjamin Diokno likened the plan to remove the inequitable incentives in the second package of the Tax Reform Acceleration and Inclusion (TRAIN) Law to “cutting the pork barrel” of taxes.
This follows as the budget chief is pushing for the approval of the second tranche of reforms in the TRAIN package that targets corporate duties.
“Many of some 200 tax incentives are ‘redundant’ and are ‘given away’ by politicians,” said Diokno in a radio interview. “This is what I call pork barrel on the tax side. It’s unnecessary, but given away as an incentive.”
He continued, “Jobs that will be generated by new foreign investors and the additional taxes collected from rationalized incentives will offset losses from lower corporate incomes taxes.”
On Monday, President Rodrigo Duterte urged lawmakers to pass the second package of the TRAIN law after the first tranche took effect last 1 January and raised duties on petroleum fuel, cars and sugar-sweetened drinks.
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“Package 2 will lower corporate income taxes, especially for our small businesses. Lower taxes mean they will have more money to invest and create more jobs,” Duterte said.
The second tranche of the tax reform agenda seeks to lower corporate income taxes paid by 95 percent of businesses while providing new fiscal incentives to deserving recipients.
But the TRAIN 2 package received lukewarm reception from senators, as both the majority and minority bloc members refused to sponsor the bill.
Some senators cited the negative impact of passing this package of TRAIN and discouraging investors to pursue business opportunities in the country, which can also result to job losses.
In an earlier interview, Diokno said that senators should look at the benefits of TRAIN 2 objectively.
“They are part of the administration, right? And it is their responsibility to respond to the demands of the President,” said Diokno.
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