Several business and professional groups have expressed support to the Senate version of the Corporate Income Tax and Incentives Reform Act (CITIRA) saying this addresses refinements previously proposed, such as faster rate reduction of the CIT and a longer transition period.
The groups — composed of the Anvil Business Club, Bankers Association of the Philippines, Federation of Filipino-Chinese Chambers of Commerce and Industry Inc., Financial Executives Institute of the Philippines, Foundation for Economic Freedom, Management Association of the Philippines, Makati Business Club, Organization of Socialized Housing Developers Association and the UP School of Economics Alumni Association — expressed support for Senate Bill (SB) No. 1357 which will reduce the CIT from 30 percent to 20 percent, eventually putting the county within the Asean range.
The scheduled CIT rate reduction is fixed for the first five years which is also shorter than the government-backed 10 years.
The groups said this scheme will help reduce uncertainty which is detrimental to doing business.
They also backed the bill as it extends the transition period to seven years instead of five, which is provided to certain firms under the gross income earned tax regime to adjust their operations and prevent dislocation.
“This move will not only make us more competitive in attracting foreign investments, but it will also make our domestic corporates more competitive as they expand their operations or bring their goods in the international market,” the groups said in a statement yesterday.
“We support the CITIRA as it will modernize the fiscal incentives system. We believe in the underlying principles of having a tax incentives system that is transparent, performance-based, targeted and time-bound. We believe in the equitable sharing of the tax burden, as we believe in the equitable enjoyment of living in an orderly, healthy and prosperous society,” they added.
The SB also keeps the current one-stop shop approach for registered enterprises, which the groups said would allow them to deal with only one tax agency, thus avoiding the inconvenience of going through difficult processes and different rules of local government units.
“While there remain few key issues in the SB that need to be addressed, we strongly believe that passing the law will provide long-delayed certainty that will help the Philippines compete for job-creating investments,” they said.
