A KEY legislator said that the House of Representatives plans to include coronavirus disease 2019 (COVID-19) relief via incentives contained in the Corporate Income Tax and Incentives Rationalization Act (CITIRA).
“We intend to insert at the bicameral conference committee level COVID (relief) as eligible (for incentives),” Albay Representative and House Ways and Means Committee chairman Jose Maria Clemente S. Salceda told reporters via Viber Thursday.
Asked how companies can avail of CITIRA incentives after having been set back by COVID-19 and the associated quarantine, Mr. Salceda told BusinessWorld via text message: “We will easily assess the damages.”
Finance Secretary Carlos G. Dominguez III has said that the department is reviewing the proposed bill to provide “tailored” relief programs for firms hit by COVID-19.
The CITIRA bill, which aims to gradually lower the corporate income tax to 20% from the current 30% and rationalize the tax incentive system, is still pending before Congress, which is scheduled to resume on May 4.
Companies that qualify for incentives under CITIRA may avail of up to 50% additional deductions on direct labor expenses, up to 100% additional deductions on training and development expenses, and up to an additional 50% on top of the 100% deduction now allowed on the purchase and use of inputs from domestic suppliers, which will benefit domestic industries and producers.
Senator Juan Edgardo M. Angara, vice chairman of the Senate ways and means committee, said that the Philippines lost potential foreign investors due to the “uncertainty” over CITIRA.
“We have to put some certainty into the future because you’re talking about people who are deciding on one billion dollars worth of investment. Companies have to know what their bottom line will be for the next 10 years if they come to the Philippines,” he said in a virtual briefing hosted by the Foreign Correspondents Association of the Philippines Thursday.
The administration has passed three tax laws so far: the Tax Reform for Acceleration and Inclusion law (TRAIN) and the two consecutive increases in sin taxes — Republic Act (RA) No. 11346, which raised excise taxes on tobacco products, and RA No. 11467, which raised excise taxes on electronic cigarettes and alcohol products.
Other pending measures under the tax reform program include the Passive Income and Financial Intermediary Taxation Act; the proposal to provide a uniform framework for real property valuation and assessment; and the bill increasing the government’s share from mining revenue. — Genshen L. Espedido, Charmaine A. Tadalan