The umbrella organization of exporters in the country is pushing for the passage of a bill immediately reducing corporate income tax (CIT) rate to 20 percent with no condition to make the country at par with other countries in Southeast Asia.
Sergio Ortiz Luis Jr., president of the Philippine Exporters Confederation Inc. (Philexport), said the group strongly supports the Corporate Income Tax bill of Sen. Ralph Recto which proposes a taxpayer segmentation.
“(This) will help MSMEs (micro, small and medium enterprises) enjoy even lower tax rates than the proposed 20-percent CIT,” he said.
Ortiz-Luis said the group also recommended the removal of the performance threshold to avail of incentives, such as tax refunds for start-ups and MSMEs.
Recto filed the Senate Bill No. 595, otherwise known as an Act instituting income tax reform for corporate taxpayers, which seeks to lower the corporate income tax rate from the current unitary or single income tax rate of 30 percent with graduated rates ranging from 5 percent to 25 percent.
In the Association of Southeast Asian Nation (Asean), Philexport said the Philippines has the highest CIT rate at 30 percent, while the average CIT rate is at 22.4 percent in the region.
A new version of the proposed Comprehensive Income Tax and Incentives Rationalization Act (CITIRA) is set to be filed at the Senate as stakeholders in the government sector seek a “win-win” type of support for industries.
The second package of the comprehensive tax reform program, CITIRA reduces corporate income tax from 30 percent to 20 percent over 10 years.
Apart from passage of bill lowering corporate income tax, Ortiz-Luis said export stakeholders will continue pushing for the enactment of legislation that impact on businesses.
These are the Warehouse Receipts Act, Bamboo Industry Development Act, Murang Kuryente Act, Open Access in Data Transmission Act, Customs Amnesty Act, National Quality Infrastructure, and Amendments to the Magna Carta of MSMEs, Philippine Ports Authority Act, Public Services Act, and Asin Law.
“We are also involved in blocking attempts to pass unfriendly labor bills, such as the security of tenure which has been re-filed,” he added.
The Department of Trade and Industry (DTI) projects export of merchandise goods to be flat this year but services will continue to show single digit growth, which will push overall exports to a positive growth.
In 2020, the DTI said exports should to rebound to a growth rate of 4 to 6 percent.
Philexport targets a six-percent revenue growth target this year on the back of the full implementation of the export development plan.
Like the DTI, Philexport is counting on services export such as the business process outsourcing (BPO) and tourism sectors.
Philexport continues to push for the expansion of agriculture exports and non-traditional products while diversifying markets sector.
