MANILA, Philippines — A federation of Filipino-Chinese businessmen expressed serious apprehension on the proposed Tax Reform for Attracting Better and High-quality Opportunities or TRABAHO Bill, the second tranche of tax reforms pushed by the Duterte administration.
Henry Lim Bon Liong, president of the Federation of Filipino-Chinese Chambers of Commerce and Industry Inc., said the group is concerned that the removal of tax perks might become a burden to investors, aside from the possibility that affected big businesses might transfer to other countries, such as Vietnam, for cheaper labor expenses.
“It’s a give and take, but if you ask PEZA director (Charito) Plaza, she is against TRABAHO bill because it will take some of the perks,” he said, referring to the position of the Philippine Economic Zone Authority on the measure.
He also said: “What we are, as a federation, we have our own stand and we are joining the PCCII, AMCHAM to have a common stand on Trabaho (Bill),” referring to the Philippine Chamber of Commerce and Industry and the American Chamber of Commerce.
Liong cited as an example the China toy maker for Mattel, which moved its production to Vietnam because of the high tariff rates resulting from the US-China trade war.
“There are always good and bad (effects)… if the TRABAHO bill can maintain some of the perks for investors and lower the income tax (since) we have the highest income tax in the whole of Southeast Asia, (then) that is one thing that can make us competitive also,” he said.
He added that while investors, even if they have enjoyed the perks for many years while in the Philippines, could still easily move to other countries when these perks cease.
The House committee on ways and means approved House Bill 176, also known as TRABAHO bill last week. It proposes to slash the country’s corporate income tax rate from 30 percent to 20 percent (two percent every two years starting January 2021 until January 2029) and make up for lost revenues by restructuring the tax perks given to certain companies.