Several industry groups have expressed support for the bill, saying it would result to increased government revenues, particularly from foreign businesses investing in the country.
The Philippine Chamber of Commerce and Industry (PCCI) on Thursday asked lawmakers for a long transition period of at least 10 years for the proposed reforms under the Comprehensive Income Tax and Incentive Rationalization Act (CITIRA) to take effect.
PCCI president Ma. Alegria S. Limjoco said the government should allow for a transition period to avoid possible job losses.
“We support the CITIRA because of course we want to reduce the corporate income tax from 30 to 20 percent,” Limjoco told reporters in a chance interview.
“Now for the incentives and all that, instead of five years, we are hoping (the government would) give us more (transition period) time,” she said of the proposal of only five years.
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She said the job losses would be inevitable although this can be minimized if an extended transition period is granted.
Formerly called the TRABAHO Bill and certified as “urgent” by President Duterte, House Bill 313 seeks to gradually reduce the corporate income tax rate to 20 percent from the current 30 percent. The bill, moreover, aims to make changes to the current tax incentives regime.
Several industry groups have expressed support for the bill, saying it would result to increased government revenues, particularly from foreign businesses investing in the country.
Early this week, Department of Trade and Industry Secretary Ramon Lopez pushed for a transition period of up to 10 years for the new tax regime under the CITIRA bill.
“Definitely if we adopt the bill as it is currently structured, there is the potential risk, and that is the reason why we are suggesting a softer landing by extending the transition period,” Lopez said.
Both the export and BPO sectors oppose the bill as structured on fears this leads to the cancelation of expansion plans or the outright closure of businesses.
In an earlier interview, Korean Chamber of Commerce President Ho-Ik Lee said removing the fiscal incentives would only drive foreign investors away.
The Philippine Economic Zone Authority said reworking the tax incentives affects 7.7 million direct and indirect workers under the ecozone industry, which account for 10 percent of the country’s labor force.
