The Senate version of the second Tax Reform for Acceleration and Inclusion (TRAIN) is likely to be slightly different from the one submitted by Malacañang and that of the House of Representatives to address concerns over job losses and slow growth ensuing from rationalization of tax incentives, Senate sources indicated over the weekend.
But Sen. Juan Edgardo M. Angara, chairman of the Ways and Means Committee tasked to review the TRAIN 2 bill, declined to give details, saying panel members have yet to start hearings on the administration’s tax bill.
Angara added senators expect to scrutinize details of the tax measure when Senate panel start hearings the TRAIN 2 bill onTuesday. “We needed to wait for the House to approve it first.”
The senator said the committee is not inclined to fix a deadline for passing the latest tax bill endorsed for approval by Malacañang. He said the Ways and Means Committee has yet to open hearings on the money measure “so we can’t say how long the hearings will take” for the committee to bring the bill to the plenary for Senate approval on second and third reading.
Still, Angara did not rule out other complications as he expects “some challenges” given the nature of revenue raising measures additional impositions.
Earlier, Danilo C. Lachica, president of the Semiconductor and Electronics Industries in the Philippines Foundation Inc. (Seipi) said TRAIN 2 could force the semiconductor industry to lay off 140,000 workers once fiscal incentives are rationalized.
Lachica disclosed that several multinationals are now locating their expansions outside the country, largely due to the uncertainty of keeping their tax incentives here.
The Seipi chief said tax incentives are needed for the country to stay on a par with its Asian competitors. Apart from this, he said multinationals want the government to retain the Philippine Economic Zone Authority (Peza) as their point agency for investment needs.
“Incentives are important to remain competitive with the other Asian countries for foreign direct investments. Being mostly exporters, multinationals would also like to see that Peza remains as their one-stop shop for business needs,” Lachica explained.
TRAIN 2 seeks to reduce corporate income tax to 25 percent, from 30 percent and rationalize fiscal perks given to locators in economic zones.
Foreign chambers of commerce earlier noted that among the top locators in these eco zones are the electronics and semiconductors firms, as well as business-process outsourcing, adding that these are among the country’s biggest export revenue earners.
In disputing the industry’s fears, Trade Secretary Ramon M. Lopez earlier told the BusinessMirror, “It is not certain that it will lead to job losses, but we shall continue to attract potential investors even under the proposed set of incentives, which are enhanced, modernized, made more performance-based and time-bound.”