AUSTRALIAN companies are seeking “clarity” on legislation proposing to reduce the corporate income tax (CIT) and streamline fiscal incentives, now pending before the 18th Congress.
“Australian businesses are interested in the CITIRA (Corporate Income Tax and Incentives Rationalization Act) legislation,” Australian Ambassador to the Philippines Steven J. Robinson said in an interview on the sidelines of a media event hosted by the Embassy.
“The sooner they have clarity and they understand what they’re dealing with the better off everyone will be.”
The measure provides for the gradual reduction of the CIT to 20% by 2029 from the current 30%; and the removal of fiscal incentives deemed redundant.
It is among the remaining packages of the administration’s comprehensive tax reform program (CTRP), which President Rodrigo R. Duterte highlighted in his fourth State of the Nation Address last July 22.
The tax measure hurdled the House of Representatives as House Bill No. 4157, on Sept. 13; but is still being discussed at the Senate Committee on Ways and Means, chaired by Senator Pilar Juliana S. Cayetano.
It nearly hurdled the 17th Congress after it made it to final reading in the House, but failed to win approval from the Senate before the session adjourned on June 3.
This uncertainty, which had long been a concern of businesses looking to invest in the Philippines, has lingered, Mr. Robinson said.
“At this point, we just don’t know so, it’d be good when we do know, then Australian business can make its mind up,” he said.
“Once there’s clarity, then everyone knows what the score is for the future and they’ll be able to make their decisions appropriate.”
Also among the remaining CTRP packages are proposals to increase excise tax on alcohol products and electronic cigarettes; centralize property valuation and assessment; and simplify the tax structure for financial investment instruments.
The government has so far passed Republic Act No. 10963, which slashed personal income tax rates and increased or added levies on several goods and services; RA 11213, the Tax Amnesty Act, which grants estate tax amnesty and amnesty on delinquent accounts left unpaid even after being given final assessment; and RA 11346, which will gradually increase the excise tax on tobacco products to P60 per pack by 2023 from P35 currently. — Charmaine A. Tadalan