Corporate income tax cuts won’t lead to job losses

FILE: DOF Undersecretary Karl Kendrick Chua (Photo: Dr. Karl Kendrick Chua /Facebook)

MANILA — Finance Undersecretary Karl Chua said the removal of certain incentives under the proposed tax reform measure will not result in job losses.

In an interview Tuesday after the Senate hearing on the Package 2 of the proposed tax reform, Chua said they have not determined which sectors will lose their incentives since this will depend on the Bureau of Investments (BOI) Single Investment Priorities Plan (SIPP).

“And even if the industries that will no longer have the same incentives some of them are very profitable so they will operate anyway because there is a sure market and the talent is here, the mineral is here, the land is here,” he said.

Members of the House of Representatives approved on third and final reading its version of CIT, dubbed as the Tax Reform for Attracting Better and Higher Quality Opportunities (TRABAHO) last September 10.

The bill aims to lower income tax rates from 30 percent to 20 percent, at a rate of two percent every other year starting 2021.

This is intended to benefit the micro, small, and medium enterprises (MSMEs), which comprise around 99 percent of all businesses in the country and employ about two thirds of total workers in the country.

Chua said reduction of corporate income tax “creates a lot of new money to invest and expand and create jobs.”

He said the Department of Finance will work with the Department of Trade and Industry (DTI) and the BOI “to ensure that the SIPP really provides incentives to deserving firms.”

“So we can preserve the good jobs and we are going to sunset those that do not deserve because maybe they are very profitable and even without incentives they will continue to operate and keep the jobs,” he said.