MANILA – Lawmakers say they would rather take their time deliberating over the proposed Tax Reform for Acceleration and Inclusion Package 2 (TRAIN 2) while studying how to improve the country’s tax system.
During a Makati Business Club (MBC) Forum, House of Representatives chairman of the ways and means committee, Dakila Carlo Cua, said the TRAIN 2 “should not be rushed.”
“Package 2 is supposed to lower the corporate income tax and fix the kinks in the incentives regime, so the investors will come in and we can become more attractive as an investment destination in the region. In the middle of it all, should be a tax amnesty package to allow our ‘locked capital’ to be unlocked and to be released to the economy and further fuelling the economic growth,” said Cua, who sponsored a bill on TRAIN in the lower house.
“This is really a big picture that has to go together. We agree that it should not be rushed. There has to be some value in the whole design,” he added.
On the sidelines of the forum, Senate committee on ways and means panel chair Juan Edgardo Angara told reporters that it is difficult to predict the passage of TRAIN 2 in the legislative branch this year.
“With the pronouncement of Senator (Vicente) Sotto (III), senator (Juan Miguel) Zubiri, I think we need to take time to get a consensus as to this bill,” Angara said.
Unlike in the lower house, TRAIN 2 has yet to find a sponsor in the Senate. However, bills on some portions of the TRAIN 2, particularly on fiscal incentives and lowering of corporate income tax, have already been filed by senators, according to Angara.
He added that the election period in 2019 also creates uncertainty for the passage of TRAIN 2 in the near term.
Some senators, he said, are hesitant to support TRAIN 2 because it can lead to losing investors to neighboring countries like Vietnam and Thailand, which are generous in giving incentives, and losing the jobs here for Filipinos.
Angara mentioned that it is also possible that the inflationary impact of the first package of TRAIN left some senators hesitant to willfully support the next package of the tax reform.
“The Duterte administration is still in power in the next four years so there’s a lot of time to pursue (it),” Angara said.
Both Cua and Angara emphasized that TRAIN 2 should not create uncertainties for foreign businessmen on whether or not to invest in the Philippines.
Meanwhile, MBC Trustee and former Philippine Ambassador to the United States Jose Cuisia Jr. said lawmakers should also look into the possible impact of TRAIN 2 to the country’s image, as government promotes the Philippines as an investment hub.
“We’ve been criticized for not honoring the sanctity of contracts, and that’s going to have an impact on foreign direct investments,” said Cuisia.
The executive branch targets to pass the TRAIN 2 as a law by end of the year. (PNA)
