CLARK FREEPORT ZONE – To keep its members informed about the government’s tax reform moves, the Clark Investors and Locators Association (CILA) held a two-day seminar on February 12 and 13, 2018.
While the public is getting more skeptical about the Tax Reform for Acceleration and Inclusion Law (TRAIN), CILA called on Clark’s business community to learn more about this new legislation.
Clark’s business community responded well, as the said seminar was attended by institutions within and outside CILA.
CILA President Dr. Francisco L. Villanueva, Jr. said investors should see the transition from the old to the new taxation system as an opportunity to communicate with the government.
“The government needs our (investors) feedbacks on the TRAIN Law. Now is the opportunity for our voices to be heard.”
Resource speakers from the SyCip Gorres Velayo & Co. (SGV & Co.) talked about TRAIN’s implications on the national economy and its effects on the grassroots level.
Aside from the issue of tax reform, the speakers also talked about the latest Bureau of Customs (BOC) policies on import audit and the latest global trends on digital taxation.
Republic Act 10963
The first phase of TRAIN was passed as the Republic Act 10963, the implementation of which began on January.
Sonia Segovia, SGV’s tax partner, said RA 10963 formed merely a portion of the comprehensive tax reform program. Within this first phase, the government aimed to reduce tax rates and make the paying of taxes simpler.
Such was the reason why all compensation-based workers with a salary of or less than to PHP 250,000.00 would no longer be required to pay personal income tax.
However, TRAIN entailed some ‘adverse effects’ on Filipinos from the lowest economic bracket, as the prices of some commodities surged.
While the government is gradually shifting to the new system, around 10 million Filipinos could be burdened by the sudden price surge of commodities.
Alexander E. Dacanay, SGV’s Transaction Advisory Services senior director, likened the transition to the new taxation system to birth pains.
He said the alarming price surge would eventually be countered since the government would provide cash transfers to Filipinos who belong to the lowest economic bracket.
Aside from the cash transfers, Dacanay said the government is also eyeing medium-term impacts such as the creation of more than 2 million jobs in the next five years, the incremental growth of the Gross Domestic Product (GDP) until 2022, and the dissipation of inflation rate.
On top of these, the government is targeting the total eradication of poverty rate by 2040, through the National Economic and Development Authority’s AmBisyon Natin 2040 (Our Vision for 2040).