FEF supports rationalization of fiscal perks.
The proposal to rationalize fiscal incentives under the second tax reform package has gained support from a group of economists, former government officials.
In a statement, the Foundation for Economic Freedom (FEF) said it is backing the planned restructuring of tax perks which some business groups have conveyed reservations in fear of losing the country's competitiveness in attracting investments.
'We commend the major principles proposed to rationalize fiscal incentives, namely to link incentives to performance and to limit the focus of incentives to sectors that will generate economic benefits such as employment, exports, etc.,' FEF said.
In particular, the FEF supports the phasing out of all existing incentives except for a subset of companies which are employment-intensive, and are likely to move to other countries without incentives.
The group also favors the plan to grant new incentives outside of this small subset, which will be centralized in an Economic Development and Fiscal Incentives Review Board, where employment and contribution to economic development shall be the paramount considerations.
The FEF also endorses the phasing out of incentives for redundant investment and accompanying Tax Reform for Acceleration and Inclusion (TRAIN) 2 with administrative reforms that will improve the professionalism, efficiency and accountability of taxing authorities.
'We support further the retention of the 40 percent optional standard deduction, rather than a reduction to 20 percent, in line with the principle of making tax compliance easy and simple,' the FEF said.
Aside from the rationalization of fiscal incentives under the second tax reform package, the FEF also supports the reduction in the corporate income tax rate to 25 percent or 'even lower should government finances allow it, in order to align the country's tax rates with the rest of ASEAN.'
The Department of Finance is reforming fiscal incentives to make them conform to the principles of being performance-based, time-bound, focused and transparent.
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|Publication:||Philippines Star (Manila, Philippines)|
|Date:||May 4, 2018|
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