MANILA — The second package of the Duterte administration’s Comprehensive Tax Reform Program (CTRP), which is expected to lower corporate income tax rates and rationalize fiscal incentives to investors, can attract the much-sought-after investments necessary to generate jobs, a World Bank (WB) economist said Monday.
“That is really about bringing the corporate income tax rate of the Philippines closer to neighboring countries in the region… and to create the same incentives for investors to come and to do business here in the Philippines,” WB lead economist Birgit Hansl said in an interview.
“If there would be more investments, there could be more growth,” said Hansl, also the Program Leader for Equitable Growth, Finance and Institutions for Brunei, Malaysia, Philippines and Thailand.
Hansl said the second package of the CTRP aims to create a more level playing field for investors or corporations in the Philippines, as it makes corporate income tax rates similar to neighboring countries.
She also underscored the need for the Philippines to reduce regulatory burdens and create an environment that promotes higher levels of competition.
“So these are often more fundamental market structures issues companies would like to see before they enter the market as an investor,” she added in a press briefing.
The WB economist further said the country should also invest in infrastructure and education, skills and health to achieve inclusive growth.
“What the people need is the right condition to take part in growth and they usually need the certain set of skills to get the jobs that are higher paying,” Hansl said.
“Because ultimately, firms have to have an incentive to expand their production and employ more people and create these jobs. And that is the business environment but also the physical infrastructure environment that needs investment and work from the authorities to attract this job creation,” she added.
The Tax Reform for Acceleration and Inclusion (TRAIN), the first package of the CTRP signed into law by President Rodrigo Duterte last December, reduced personal income taxes and adjusted excise taxes on fuel and automobiles. (Leslie Gatpolintan/PNA)
