The Department of Finance (DOF) will request the Senate to consider prioritizing the passage of the Corporate Income Tax and Incentives Reform Act (CITIRA).
This as Senate President Vicente Sotto III said the upper chamber may put aside the pending tax packages if the coronavirus disease threat continues.
“The passage of CITIRA will result in higher investments,” Carlos Dominguez, DOF secretary, told reporters through Viber yesterday.
“We are requesting the Senate leadership to consider prioritizing CITIRA,” he added.
The bill was passed by the House of Representatives and is awaiting approval by the Senate.
The Action for Economic Reforms (AER) also recently appealed to the Senate President not to entertain any ideas that will stall CITIRA and other pending bills on tax reform, in response to Sotto’s statement that the tax reforms may have to take a back seat as the Senate has to give priority to the issue of the coronavirus outbreak.
AER said in a statement there is no conflict between passing tax reforms and putting in place measures to address the outbreak, for they are tackled independently and simultaneously. Further, CITIRA is already on the cusp of approval, it said.
“There is no better moment than now to have the CITIRA passed. The momentum is there, and the narrow window to let the inflow of foreign direct investments is open as investors flee China that is besieged by the trade war with the US and the coronavirus epidemic,” the organization said.
The DOF also said in a press release yesterday the measure will keep the Philippines highly competitive when compared with other countries in the Asean region that also offer tax perks to investors.
In response to recent news that Thailand is offering tax incentives to high-tech firms relocating from China, Karl Kendrick Chua, DOF undersecretary, said the Philippines’ incentive offerings under CITIRA are “at the very least at par with, if not more generous and competitive compared to, those of Thailand.”
“There is a recent report that Thailand is offering a 50-percent income tax discount for five years to qualified high-tech firms, subject to conditions such as a minimum level of investment of 1 billion baht (or around $32.7 million) and investment commencement in 2021. Relocating companies to Thailand will face a 10 percent tax on net income, instead of the regular 20 percent tax,” Chua said.
