Philippines: DOF sees timely passage of tax reform packages within 2018

  • The Department of Finance is upbeat for the timely passage of the Duterte administration’s remaining tax reform packages, including the second one recently filed in Congress seeking to gradually cut corporate income tax rates and reduce fiscal incentives to investors.
  • Finance Secretary Carlos Dominguez III expressed the hope that lawmakers can begin hearing the second package of the Comprehensive Tax Reform Program as soon as the Congress resumes its regular session in May 18.
  • “With the timely filing of the measure in the House, we are optimistic that this proposal, along with the remaining tax reform packages, would be approved by the Congress within the year,” Dominguez said in a statement.
  • House Bill (HB) No. 7458 provides for a one-percentage point reduction in the current 30% corporate income tax every year for domestic corporations, resident foreign corporations and non-resident foreign corporations starting 2019, provided that the cut would not reach lower than 20%.
  • The bill also seeks to “modernize” investment incentives to ensure that only industries that provide positive spillover to the economy, based on rigorous cost-benefit analysis, are given incentives.
  • The DOF is targeting to introduce in 2018 the rest of the CTRP packages that mainly cover property and capital income taxation.

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