THE MAIN association of Filipino-Chinese businesses said it expects reduced corporate tax rates to attract more foreign investment and encourage firms to expand their operations, and declared its support for pending legislation that will reduce such rates while rationalizing tax incentives.
The Federation of Filipino Chinese Chambers of Commerce & Industry, Inc. (FFCCCII) said that it “supports” the passage of the proposed Comprehensive Income Tax and Incentives Rationalization Act (CITIRA) as it will “improve competitiveness” among companies and bring down Philippine tax rates to level with regional economies.
“We the FFCCCII support the passage of CITIRA. The reduction in corporate income-tax rates will improve the competitiveness of Philippine companies, and allow them to use the tax savings to expand their business or start new ventures, thus increasing creation of new jobs. This reduction of corporate income tax will also help attract more foreign direct investment,” it said in a statement.
Finance Undersecretary Karl Kendrick T. Chua has said that the Department of Finance (DoF) expects lower income taxes to encourage companies to invest their savings in business expansion, which will ultimately generate 1.5 million additional jobs.
Meanwhile, Finance Undersecretary Antonette C. Tionko said the proposal to have a longer transition period for CITIRA was among the “refinements” that can be discussed while CITIRA makes its way through Congress, but the department still backs a five-year transition period.
“That’s one of the refinements that can be discussed. Of course with consultations and everything… I told them that our position is five years,” Ms. Tionko told reporters last week when asked about the department’s position on the so-called “sunset period” for transitioning out of certain incentive programs.
The Department of Trade and Industry (DTI) has said it will support a five-to-seven year transition period for economic zone locators, as well as a seven to 10-year transition period for companies employing at least 3,000.
The House of Representatives on Sept. 13 approved its version of CITIRA, House Bill 4157, which will gradually lower corporate income tax to 20% by 2029 from the current 30%, remove tax incentives deemed redundant and make all the rest time-bound and performance-based. Its counterpart bill is now pending at the Senate.
The FFCCCII also declared its support for the “Build, Build, Build” infrastructure program as it will “interconnect” cities and provinces across the country and spur economic growth.
“To maintain and increase our global competitiveness, it’s important to keep our business-friendly policies, and have better infrastructure,” it said. — Beatrice M. Laforga