MANILA, Sept 13 (Reuters) - Philippine lawmakers backed a
reduction in the corporate tax rate and removal of unnecessary
tax incentives in a final vote on a key legislation, which the
government says would attract investment and create much-needed
jobs.
Voting 170 to eight with six abstentions, the lower house of
Congress, dominated by President Rodrigo Duterte's allies,
passed on the third and final reading a bill that would slash
the corporate income tax from 30%, currently the highest in the
region, to 20% by 2029.
The bill is among the tax reform measures Duterte is pushing
to help fund his infrastructure programme and make the tax
system fairer and simpler.
Cutting the corporate income tax rate would boost the
Philippines' competitiveness, the government has said, and
benefit the country's more than 90,000 micro, small and medium
enterprises, which in 2017 employed close to 5 million people.
The bill, which must now go to the Senate, will also
rationalise fiscal incentives to ensure that only qualified
companies would be granted tax relief.
Congressman Joey Salceda, the bill's principal author, said
the legislation, once passed into law, will create more than a
million jobs and add 1.1% to GDP growth in its first year of
implementation. The bill, he said, is part of the country's
"national response to the U.S.-China trade war".
In 2017, the government forewent 441 billion pesos ($8.48
billion) in revenues because of tax breaks deemed unnecessary or
ineffective, the Department of Finance has said.
"Incentives are not entitlements, but privileges that must
be earned," the Department of Finance has said in a presentation
to Congress last month.
($1 = 51.99 Philippine pesos)