MANILA – Registered companies pursuing innovation and research and development (R&D) to grow their businesses will enjoy fiscal incentives under the Tax Reform for Attracting Better and High-quality Opportunities (TRABAHO) bill, an official of the Department of Trade and Industry (DTI) said.
“The TRABAHO bill is actually pro-innovation, it is pro-research and development. Through the incentives that will be provided under the bill, we would like industries to become more innovative,” DTI assitant secretary Rafaelita Aldaba told reporters on the sidelines of a forum on harnessing the Fourth Industrial Revolution organized by the Philippine Institute for Development Studies (PIDS).
Aldaba said the proposed law allows for additional tax reduction on innovation and R&D expenses of registered companies.
“It’s an additional 100-percent reduction on R&D expenses. Even in your labor training expenses, it’s an additional 100 percent,” she said. “The effect is, additional profits for the company because you will be able to deduct all of these innovation-related expenses in your income.”
The trade official pointed out that additional tax reduction will result in reduced taxable income thus, companies need to pay lower taxes.
“And then your savings, well you can make use of it the way you want to. You can reinvest, or expand your R&D work,” she added.
Aldaba underscored the need for local industries to innovate with technology to thrive in the Fourth Industrial Revolution.
“All sectors will be affected even retail, agriculture, manufacturing sectors. Even us in government could be affected,” she said.
Meanwhile, the House of Representatives on Sept. 4 approved on second reading House Bill 8083, or the TRABAHO bill, the second tranche of Duterte administration’s tax reform package which aims to lower corporate income taxes (CIT) and modernize incentives. (PNA)
