Tax reform, which has provided income tax cuts for individuals and corporations to unleash their economic potential while raising funds for the administration’s unprecedented “Build, Build, Build” infrastructure modernization program, is among the key achievements of the Duterte presidency, Finance Secretary Carlos Dominguez III has said.
Dominguez said that with several packages of the Duterte administration’s comprehensive tax reform program (CTRP) and other economic reform measures in place, the Duterte administration has now accomplished “85 percent of what we have set out to do” on “the economic side.”
As head of the government’s economic team, Dominguez led efforts in getting the Tax Reform for Acceleration and Inclusion (TRAIN) Law and, later, the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act passed in Congress.
TRAIN (Package 1 of the CTRP) provided substantial personal income tax (PIT) cuts for 99 percent of the country’s wage earners after two decades of non-adjustment of the rates while CREATE (Package 2) reduced the corporate income tax (CIT) rate from 30 percent to 20 percent for micro, small and medium enterprises (MSMEs), and to 25 percent for all other businesses.
CREATE, which introduced significant improvements in the grant of tax incentives by making it more accountable and transparent, was passed decades after versions of the reform were introduced in the legislature during previous administrations.