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Philippines proposes corporate tax cuts in reform package to Congress

Philippines proposes corporate tax cuts in reform package to Congress

MANILA: Philippine President Rodrigo Duterte has proposed to cut the corporate tax rate and rationalise fiscal incentives to investors in the second of five tax-reform packages submitted to Congress, the Department of Finance (DOF) said on Tuesday. Duterte aims to fund his massive infrastructure programme by overhauling the tax system. The proposed measures, the DOF said, seeks to lower corporate income tax rate to 25% from 30% and streamline incentives to investors to plug leakages and bring in more revenues. The head of the ways and means committees of the Senate and the House of Representatives are expected to sponsor the measures for enactment. Duterte’s party holds a super-majority in the 292-seat lower house of Congress.

Tax holidays and other perks given to investors with no time limits need to be corrected as they cost the government over 300 billion pesos (US$5.95 billion) in foregone revenues every year, Finance Undersecretary Karl Chua said. While the Philippines imposes the highest corporate income tax rate in Southeast Asia, its ability to collect these taxes is relatively weak, Chua said. Finance officials have said the proposed tax packages are not only aimed at boosting state coffers but also making tax administration simpler and the tax system fairer.