The Tax Reform for Attracting Better and High-Quality Opportunities (TRABAHO) is expected to create 1.4 million jobs from 2021 to 2029 for locals and overseas Filipino workers(OFWs) who wish to return to the country, the Department of Finance said on Wednesday, October 18.
TRABAHO bill seeks to reduce the corporate income tax (CIT) under the second package of the Comprehensive Tax Reform Program (CTRP) thus freeing up more capital to firms which would lead to hiring of more people.
Finance Assistant Secretary Antonio Lambino said DOF estimates that by the first year of the bill’s implementation in 2021, some 113,944 jobs will be generated which will continue to grow until 2029. By 2029, the expected total number of generated jobs due to the bill is 1.4 million.
Lambino said that firms will be eager to hire people as doing so would come with tax incentives.
“This pro-investment tax reform package is seen to be even more attractive to firms because it will give them additional incentives on labor, domestic input and training under the proposed menu of tax incentives, while activities that already provide positive benefits to society, such as those that develop the countryside, create jobs and contribute to exports can continue to enjoy tax incentives,” said Lambino.
Under TRABAHO bill, the CIT rate will be reduced by 2 percentage point every two years starting 2021 until 2029. By 2029, CIT rate had been reduced to 20 percent.
“With lower tax rates, such a proposal is hardly inflationary while creating over a million jobs over the medium term as firms expand with more money at their disposal,” said Finance Undersecretary Karl Kendrick Chua.