Duterte tells Congress to prioritize Trabaho bill

Ralf Rivas
The Trabaho bill, which aims to reduce corporate tax and rationalize tax incentives, is mentioned in President Rodrigo Duterte's 4th State of the Nation Address

TAX REFORM. President Rodrigo Duterte backs the Trabaho bill. Photo from Shutterstock

MANILA, Philippines – President Rodrigo Duterte backed his economic managers’ proposal to rationalize corporate tax perks under the Tax Reform for Attracting Better and High-Quality Opportunities (Trabaho) bill.

In his 4th State of the Nation Address on Monday, July 22, he appealed to Congress to pass the Trabaho bill. (READ: Things you need to know about Trabaho bill)

The Trabaho bill aims to:

  • reduce the corporate income tax rate from 30% to 20%
  • broaden the tax base by removing some of the preferential or lower corporate tax rates
  • rationalize tax incentives by making them performance-based, targeted, time-bound, and transparent

Currently, the list of activities qualified for tax incentives are scattered in various laws. The Trabaho bill aims to fix that, where only those activities included in the Strategic Investment Priorities Plan may be granted tax incentives.

The bill has been opposed by economic zone groups amid fears that tax perks will be taken away. They even said that some foreign investors have held off expansion plans due to uncertainty on how the bill will turn out. 

Businessmen also fear the measure would lead to job losses – ironic as trabaho is the Filipino word for job.

The Department of Finance said the measure will be revenue-neutral and is not geared towards generating funds, but just towards fixing the tax regime. – Rappler.com

Ralf Rivas

A sociologist by heart, a journalist by profession. Ralf is Rappler's business reporter, covering macroeconomy, government finance, companies, and agriculture.