Corporate income tax (CIT) cuts under the House-approved Tax Reform for Attracting Better and Higher Quality Opportunities (Trabaho) bill are unlikely to generate higher investments given the Philippines’ poor business environment, a Fitch Group unit said on Thursday. Trabaho, the second tax reform package under the Duterte administration’s Comprehensive Tax Reform Program (CTRP), calls for a gradual CIT lowering and the streamlining of tax incentives for investors. “The proposal to lower corporate income tax rates is unlikely to result in a tangible boost to investment without an improvement to the business environment,” Fitch Solutions Macro Research said in a September 20 report. “We are therefore maintaining our forecast for the Philippines’ budget deficit as a share of GDP to come in at 2.9 percent in 2018 and average 2.6 percent from 2019-2027,” Fitch Solutions added. Tax rates, in comparison, only rank fifth.

Source: Manila Times September 20, 2018 16:41 UTC