Lawmakers nix plan to defer corporate income tax rollback

Lawmakers are withdrawing their plan to push for the deferment of the rollback in the corporate income tax rate to 30 percent next year from the current 35 percent amid appeals from businesses, a government source said.

Earlier, the House Ways and Means committee, chaired by Antique Rep. Exequiel Javier proposed the possibility of delaying the decrease in the corporate income tax rate and instead increase the benefits for individual income taxpayers.

Javier and members of the committee, however, are no longer keen on pushing their earlier proposal.

A ranking government official said businesses and corporate taxpayers have complained against the plan. The government, through Republic Act 9337 or the Expanded Value Added Tax Act of 2005 jacked up the corporate income tax to 35 percent from 32 percent November of 2005.

Under the law, the corporate income tax rate would go down to 30 percent starting 2009.

The Department of Finance estimates that the National Government would have to forego P13 billion in potential revenues once the corporate income tax rate is reduced to 30 percent starting 2009.

The government hopes to balance the budget this year after decades of posting deficits.

Last year, the government was able to trim the deficit to P9.4 billion or way below the programmed ceiling of P63 billion.

The Bureau of Internal Revenue (BIR) has a revenue target of P845 billion while the Bureau of Customs has a collection goal of P254 billion.