Most MSMEs back TRABAHO bill — DOF

MANILA, Philippines — Majority of micro, small and medium enterprises (MSMEs) in the country support a bill which seeks to reform the country’s corporate income tax and fiscal incentives system, according to the Department of Finance (DOF).

Citing results of an independent, third party survey conducted during the Sulong Pilipinas Forum last year, Finance Assistant Secretary Antonio Lambino said 91 percent of MSME-respondents support the Tax Reform for Attracting Better and High-Quality Opportunities or the TRABAHO Bill.

Lambino said the survey also showed that 92 percent of MSMEs consider the TRABAHO bill an important factor in the development of the country.

The TRABAHO bill is the second package under the government’s Comprehensive Tax Reform Program (CTRP). It aims to reduce corporate income tax (CIT) and rationalize fiscal incentives.

According to the DOF, the measure stands to benefit MSMEs  which account for more than 99 percent of local businesses and 63 percent of jobs in the country.

Finance Secretary Carlos Dominguez earlier said the proposal also seeks to improve the Philippines’ competitiveness, as it pushes for the reduction in the CIT from the current rate of 30 percent to 20 percent, closer to the regional average.

Dominguez also said fiscal incentives under the bill would not be removed, but would be rationalized to ensure that they are performance-based, targeted, time-bound and transparent.

The finance chief said the DOF remains optimistic that the measure, together with other remaining tax reform packages would be passed within the year. 

“It will raise revenues to fund our infrastructure and social development programs. It will bring our tax effort to levels compatible with the most dynamic economies of the region,” Dominguez said.

In November 2018, four Sulong forums were held in Cebu City; San Fernando, La Union; Clark, Pampanga; and Davao City to increase participation of small businesses.

During the forums, MSMEs listed a number of recommendations to further improve the ease of doing business in the country and drive economic growth.

The top recommendations include the prioritization of agricultural productivity to increase farmers’ income, construction of more infrastructure to improve access and mobility, simplification of loan requirements for MSMEs and farmers, improvement in the access to education for poor families, and the provision of livelihood training for the recipients of 4Ps (Pantawid Pamilyang Pilipino Program) assistance from the government.