Sotto files TRAIN 2 bill

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Metro Manila (CNN Philippines, August 2) — A bill for the second tranche of the Duterte administration's tax reform program has been filed in the Senate.

Senate President Vicente "Tito" Sotto filed on Thursday Senate Bill 1906 to introduce reforms in the corporate income tax and fiscal incentives

This is the second package in the administration's comprehensive tax reform program, following the implementation of the Tax Reform for Acceleration and Inclusion (TRAIN) 1 law last January.

The bill seeks to lower corporate income tax (CIT) from 30 percent of the corporation's earnings to 25 percent, offsetting this by repealing 123 special laws on investment tax incentives. The bill also seeks to repeal the National Internal Revenue Code exemptions on taxing government-owned and controlled corporations.

"While the purpose of the CIT imposed provides revenue for the government, a way of redistributing wealth and a way to regulate the corporation's operations to reinforce the political relevance of CIT, it is about time that the government lowers (it)," Sotto said in the explanatory note of his bill.

He added fiscal incentives will not be removed, but will be rationalized to avoid tax evasion.

Sotto said this tax reform bill will not cause inflation.

"Considering that this is a revenue tax measure, it will not have any inflationary effects but it may one way or another provide support to some 90,000 small and medium enterprises (SMSEs) to be covered by this Act," Sotto said.

The implementation of the second tax reform package, also known as TRAIN 2, has been one of the priorities set by President Rodrigo Duterte during his State of the Nation Address (SONA).

House Speaker Gloria Macapagal-Arroyo said TRAIN 2 will be a priority bill in the House of Representatives.