We will do it as fast as we can, reducing taxes if we can offset it against other benefits (and) other tax exemptions that we are giving.

The Philippine Chamber of Commerce and Industry (PCCI) said reducing the corporate income tax (CIT) at a faster rate should help encourage more investments in the Philippines.

This was learned from PCCI Chairman George Barcelon who bared full support for the tax proposal known as the Corporate Income Tax and Incentives Rationalization Act (CITIRA), saying this will bring parity with the country’s ASEAN peers.

“We’re fully in support. I think we have to seek parity with other ASEAN countries. One issue, of course, is that everybody hopes the CIT could be reduced faster because that way we can compare ourselves with other countries. Investments will come in faster,” Barcelon said.

“I don’t know whether the Department of Finance will look into it and tweak it a bit. But as for the others, we have to put some rationalization in not giving incentives in perpetuity because other countries don’t do that,” he added.

Barcelon expressed optimism about the CITIRA’s eventual legislation given the better understanding of the business sector of its importance.

“I think now that they have explained it better to the business sector, even the PEZA (Philippine Economic Zone Authority), for a while, was concerned but now they are onboard and they think that there is a rationale behind it. It’s still going to Senate for some opinion but I think they will pass (it),” Barcelon said.

Earlier, Finance Secetary Carlos Dominguez acknowledged the rather long period phased CIT reduction, saying this cannot be done hastily.

“I agree that it’s a long period but… if we drop the rates too quickly, we are going to balloon our deficit and ballooning our deficit is going to probably mean a credit downgrade. If a credit downgrade happens, everybody’s interest rate goes up,” he added.

According to him, what they must do is to keep the budget deficit in check and seen settling at 3.2 percent of GDP this year.

“The ideal situation is to keep our deficit in check to around 3.2 percent. We will do it as fast as we can, reducing taxes if we can offset it against other benefits (and) other tax exemptions that we are giving,” the Finance chief explained.

The country’s CIT is the highest among peers in the region at 30 percent. The plan is to reduce it 20 percent by 2029.