Sunday , May 22 2022

Can fine tune the "Trabaho" bill


The Ministry of Trade and Industry (DTI) is in consultation with the Ministry of Finance (DOF) to fine-tune certain provisions of the so-called Trabaho Bill and ensure that it has only "minimal risk".

Trade and Industry Secretary Ramon Lopez told reporters last week that they both wanted a unified approach to the issue as a result of the accident that the tax package had received from various relevant agencies and stakeholders.

This develops as Congress resumes its session today and focuses on how senators should see tax reforms to attract better and high-quality opportunities (Trabaho) bill.

The Trabaho Bill aims at lowering business calculations in the country, while simultaneously rationalizing the incentives offered to investors. The latter part is considered to have a negative impact on economic zones, many of which hold foreign companies exporting to other countries.

"Let's just say [the talks] is ongoing. We do not want to discuss the details because it really is part of the internal government's discussions on how we can create and fine-tune the provisions of the Trabaho Bill, he says.

With a number of senators seeking re-election, it remains to be seen how warnings from corporate groups against massive employment losses would affect the risks of the tax package being passed this year.

Otherwise, the bill would be delayed, which is likely to lead to a major blow to the Duterte administration's plans.

Lopez claimed that their conversation with DOF has been going on from the outset. He said this conversation came as the government heard comments from the various stakeholders.

However, it was not clear why DTI only considered adjusting the accounts now, especially after it had already been in the House of Representatives despite the reservations that arose from different industries as the outsourcing sector for business processes.

Prior to this, Lopez often dismissed the concerns raised against the bill, even when its own attached authority, the Philippine Economic Zone Authority, had been highly voted for its impact on ecozone locators.

It was DTI that reached the DOF to fine-tune the bill and make sure it would only have a "minimal risk", he said.

But the DOF would have the final statement as to whether it would not even be a compromise, he added.

According to a document seen by reporters, some of the proposed changes included longer tax benefits and a longer transition period of 5 per cent gross national income tax.

Lopez said he still hoped that the bill would go through this year and note that it would give new investors security if tax rates became available to them.

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