At a time when funds\nare urgent for the huge COVID-19 response needed, research group IBON said that\nthe Duterte administration is giving up Php667 billion in revenues to boost the\nprofits of the country\u2019s largest corporations. Oligarch profits are boosted at\nthe expense of aiding poor families, containing the spread of the coronavirus,\nand treating those with COVID-19, said the group.<\/p>\n\n\n\n
In a Senate\nhearing on Tuesday, Department of Finance (DOF) Secretary Carlos Dominguez III\nsaid that the administration wants to cut the corporate income tax (CIT) from\n30% to 25% starting July this year. The CIT will be lowered again starting 2023\nto fall to just 20% by 2027. This will result in an estimated revenue loss of\nPhp42 billion in 2020 and a further Php625 billion over the succeeding five\nyears. <\/p>\n\n\n\n
The faster and\nbigger CIT cut proposed is grossly unconscionable at a time when the government\nis blaming its incomplete response to the COVID-19 crisis on the lack of funds,\nsaid IBON. Cash transfers are inadequate for tens of millions of Filipino families,\nthe government says mass testing is unaffordable, and small businesses and\nworkers are bearing the burden of precautionary measures. There is also no\nsubstantial increase in the number of health workers, beds, intensive care\nunits, and ventilators in the public health system, the group noted.<\/p>\n\n\n\n
And yet, IBON\nstressed, The DOF is using the COVID-19 crisis as an excuse to increase the\nprofits of large corporations. The Corporate Recovery and Tax Incentives for\nEnterprises Act (CREATE) pushed by the DOF as \u201cone of the largest stimulus\nmeasures in the country\u2019s history\u201d is the very same regressive TRAIN Package 2\nit has been pushing for over three years, said the group. CREATE is only its\nlatest renaming after being called Corporate Income Tax and Incentives Reform\nAct (CITIRA).<\/p>\n\n\n\n
The finance\ndepartment is also being untruthful in saying that the measure \u201cis meant to\nfuel economic dynamism, especially among the country\u2019s growth engines \u2013 the\nmicro, small and medium enterprises (MSMEs) \u2013 that employ a majority of\nFilipino workers\u201d, said IBON. In a Senate Ways and Means Committee hearing in\n2018, the DOF itself reported that 75% of CIT revenue collected comes from\nlarge corporations and only 25% from MSMEs. Hence, it is large corporations and\nnot MSMEs who are the biggest winners getting the biggest boost in their\nprofits from the CIT cut. <\/p>\n\n\n\n
IBON said that if\nthe government is really serious about supporting MSMEs and not just using them\nas a smokescreen to increase oligarch profits, it can instead introduce a more\nprogressive two-tiered CIT scheme with 20% CIT for MSMEs and a higher 35% for\nlarge enterprises. The group said that countries with such segmented CIT\nschemes in ASEAN include Thailand, Malaysia, Cambodia and Brunei.<\/p>\n\n\n\n
The proposed measure is also misguided in being designed as an incentive for foreign investors to come to the Philippines, IBON added. Most foreign investment in the country is in low value-added operations. Reducing tax revenues collected from them reduces among the biggest concrete benefits from letting them operate in the country, the group explained. <\/p>\n\n\n\n
The big business bias of the government\u2019s COVID-19 response is becoming increasingly evident, according to IBON. The Duterte administration is giving them CIT cuts, supporting lower wages for workers, and preparing huge loans, loan guarantees and bailouts. These should be corrected in favor of more generous income support for affected families, strengthening the public health system, and supporting Filipino MSMEs, said the group. <\/p>","protected":false},"excerpt":{"rendered":"
At a time when funds are urgent for the huge COVID-19 response needed, research group IBON said that the Duterte administration is giving up Php667 billion in revenues to boost the profits of the country\u2019s largest corporations.<\/p>","protected":false},"author":3,"featured_media":9686,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_exactmetrics_skip_tracking":false,"_exactmetrics_sitenote_active":false,"_exactmetrics_sitenote_note":"","_exactmetrics_sitenote_category":0,"footnotes":"","_expiration-date-status":"saved","_expiration-date":0,"_expiration-date-type":"","_expiration-date-categories":[],"_expiration-date-options":[]},"categories":[2048,14],"tags":[1601,2078,530,2079,2274,2199,2218,2273,347,116],"acf":[],"_links":{"self":[{"href":"https:\/\/www.ibon.org\/tl\/wp-json\/wp\/v2\/posts\/9684"}],"collection":[{"href":"https:\/\/www.ibon.org\/tl\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.ibon.org\/tl\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.ibon.org\/tl\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.ibon.org\/tl\/wp-json\/wp\/v2\/comments?post=9684"}],"version-history":[{"count":1,"href":"https:\/\/www.ibon.org\/tl\/wp-json\/wp\/v2\/posts\/9684\/revisions"}],"predecessor-version":[{"id":9685,"href":"https:\/\/www.ibon.org\/tl\/wp-json\/wp\/v2\/posts\/9684\/revisions\/9685"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.ibon.org\/tl\/wp-json\/wp\/v2\/media\/9686"}],"wp:attachment":[{"href":"https:\/\/www.ibon.org\/tl\/wp-json\/wp\/v2\/media?parent=9684"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.ibon.org\/tl\/wp-json\/wp\/v2\/categories?post=9684"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.ibon.org\/tl\/wp-json\/wp\/v2\/tags?post=9684"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}