TRAIN 2 won’t end perks — Diokno

Budget Secretary Benjamin Diokno gives media a rundown of TRAIN 2 during yesterday’s Kapihan sa Manila Hotel. The second package of the tax reform program called Tax Reform for Acceleration and Inclusion (TRAIN) 2 now pending with Congress will remove “redundant” and unnecessary fiscal incentives but the law will not result in additional revenues to the government, Budget Secretary Benjamin Diokno said yesterday.

“Fiscal incentives won’t be totally taken out,” Diokno said.

“We just want to make sure that they will be performance-based and necessary,” he added.

Under TRAIN 2, the corporate income tax will be reduced to 25 percent from the current 30 percent to make business tax rates competitive with other Association of Southeast Asian Nations (ASEAN) members.

Fiscal incentives under the present tax scheme will be reviewed but there is nothing to fear because the scheme is revenue-neutral, Diokno said at the Kapihan sa Manila Hotel media forum.

“Walang makakabig na additional revenue as a result of the reform (There will be no additional revenue generated as a result of the reform),” Diokno said.

Diokno expressed confidence that investments will continue to come even if some incentives are taken out.

“We will make corporate tax competitive with our neighboring ASEAN countries as we provide infrastructure and make labor competitive,” Diokno stressed.

Diokno added that actual foreign direct investments the past year as reported by the Bangko Sentral ng Pilipinas (BSP) hit $10 billion, which is the highest ever for the country.

He also noted that pledges for domestic investments continue to rise.

Economic managers are also pursuing a general tax amnesty program to encourage corporations to pay correct income taxes.

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