Simply put tax measures
enacted by the government
either regressive or progressive are considered the
lifeblood of a country. In
a civilized society, citizens
pay taxes to the government
without hindrance. Automatically without taxes the government would be paralyzed
to operate. It can be likened
to a person diagnosed with
Looking back at the universal taxation system, the
Value-Added Tax (VAT) developed by Frenchman Maurice Laure in 1954. It was the
Arroyo adminis.tration who
added two percentage points
to the original 10% VAT ceiling. Congress originally opposed the controversial measure.
With the strong intention pushing to nurse back
the country’s fiscal health,
the Malacañang initiated tax
measure “is by nature a passthrough tax” based on consumption and therefore must
be shouldered by end-users.
Apparently, the tax reform package was elevated to the Supreme Court,
questioning among others
the constitutionality and legality, that Congress has the
sole authority to legislate any
tax measures and not Malacañang.
Due to threats of massive protest actions, the
restraining order (TRO) the
expanded value-added tax
(E-VAT) was put in limbo
but eventually was resolved
by the High Tribunal on November 1, 2005, a time when
the living remembered the
Thus, the E-VAT law was
described as the cornerstone
of the government’s efforts to
escape a looming fiscal crisis.
The taxpayers were ready to
bite the bullet for the sake of
Among the 10-member
ASEAN countries, the Philippines has the highest value-added tax, at a flat rate of
All told. The revenue
generating measure of the
Arroyo administration was
anchored to strengthen and
expand micro-finance and
entrepreneurship and promote new investments that
would fulfill her promise to
create six to 10 million jobs
during her term.
Under the Duterte administration, a tax reform
package, Corporate Income
Tax and Incentives Rationalization Act (CITIRA),
formerly named Tax Reform
for Attracting Better and
or the “Trabaho” bill is enacted.
The commonalities of the
two tax measures. Again, it
announces of over a million
jobs to be created by corporate income tax cuts under
“It would rationalize
the fiscal incentives given to
some businesses by putting
time frames on them and
linking their enjoyment to
certain parameters, such as
job generation, use of local
inputs and workers training”
stated a report by the Inquirer.net.
The law is the second
phase of the Duterte’s tax
reform program after the enactment of the Tax Reform
for Acceleration and Inclusion (Train) Law.
Originally, the CITIRA
bill has met strong oppositions from the Philippine
Economic Zone Authority
(PEZA), the Department of
Trade and Industry (DTI)
and some foreing chambers
of commerce and industry.
Added to the list of disgruntled sectors, is the largest labor group, the Trade
Union Congress of the Philippines (TUCP), stating among
others, who questioned the
P500 million annual government subsidy for workers
that may lose their jobs when
the bill is implemented.
The dangling of yearly budget allocation for the
passage of the tax measure is
highly insufficient compared
with the day-to-day expenses amid rising cost of living
created by TRAIN, added
Congressman Raymond DC
Mendoza, TUCP Party-List.
A business group estimated over 700,000 workers
will be retrenched in economic zones in exchange for
lower corporate income taxes (CIT).
and issues from oppositors
were reportedly resolved, the
bill was passed and approved
in the Senate, SB No. 1357,
otherwise known as “Corporate Recovery and Tax Incentives for Enterprise Act
It was approved on third
and final reading by the Senate on November 26, 2020.
The CITIRA was among the
priority bills endorsed by
President Duterte in his 4th
SONA last July 2019.