A tax reform bill seen key to economic recovery from the pandemic is meeting last-minute proposals for touch-ups to make them more business friendly
In contrast, a stimulus bill which is also a crucial response to the new coronavirus 2019 (COVD-19), is widely embraced.
The seven members of the Joint Foreign Chambers (JFC) of the Philippines and the Philippine Economic Zone Authority (PEZA) have both called for a five-year delay in the rationalization of incentives under the Corporate Recovery and Tax Incentives for Enterprises Act (CREATE) though the former supports the proposed reduction in the corporate income tax (CIT) from 30 percent to 25 percent starting next month if the bill is passed.
However, the JFC proposes annual 1 -percentage point reductions to reach 20 percent in 2025 to be closer to the Asean average.
“We strongly recommend a five-year delay in the rationalization of fiscal incentives for existing incentivized exporters who are harmed by the severe local and global impact of the pandemic. For these existing investors, who employ over two million Filipinos, we seek a five-year pause to recover their viability,” the JFC said in a statement.

Charito Plaza, PEZA director-general, said status quo on incentives for five years will make up for the lack of “efficiency factors that investors are looking for” as she noted that “amid the COVID crisis, we are not even a choice for transferring companies because of our unstable incentive policies and rules.”
“This is creating fear and frustration to our existing investors. Our appeal is an institutional decision to oppose specific provisions of CREATE because of its adverse effects to PEZA-registered enterprises and the Philippine economy in general,” Plaza said in a separate statement.
Meanwhile, JFC urged the House of Representatives to approve on third reading before its recess on June 4 the Philippine Economic Stimulus Act (PESA) and for the entire Congress to pass the bill soon after resuming session in late July to provide very needed funds for economic recovery.
The JFC cited the PESA as being very comprehensive as it seeks to provide total funding of P1.28 trillion to a broad spectrum of sectors of the economy most during the quarantine period.
Priorities in the bill include additional funding to expand the Build, Build, Build program, wage subsidies, support for critically impacted farmers and fisherfolk, small businesses, tourism, transportation, and others.
PESA focuses on directly supporting financially the most severely damaged sectors of the economy to assist them during their road to recovery.
Unless “stimulated” with financial assistance from government, many firms will cease to operate and will lay off workers, JFC said.