Corporate income tax (CIT) based on companies’ capacity to pay ‘makes sense’ in lieu of the 10-year CIT reduction to 20 percent proposed under the Comprehensive Income Tax and Incentive Rationalization Act (Citira) bill.
Department of Trade and Industry (DTI) secretary Ramon Lopez said this in reference to Senate Bill 595 filed by Sen. Ralph Recto in July, which seeks to cut the current uniform 30 percent CIT rate in the country to graduated rates ranging from 5 to 25 percent, depending on the firms’ taxable income.
“In that context, it makes sense… so that the (Department of Finance) won’t incur a revenue loss,” Lopez said in an interview in Makati on 20 December, adding the proposal is a means for immediately reducing the country’s CIT rate, deemed the highest in Southeast Asia.
The Citira, which ends the year at the Senate after quickly hurdling the House in September, seeks to reduce the CIT to 20 percent from its current rate over a 10-year span.
But other than that, it also aims to rationalize the tax incentives, among them the perks given by the Philippine Economic Zone Authority, making it a point of contention between the DoF, which backs Citira, and the DTI-attached PEZA, which argued the provision could lead to massive job losses given that exporters see tax perks as fundamental to their operations.
Three decades after the Marcopper mining disaster devastated Marinduque’s waterways, the province is again pressing the…
Housing is probably the biggest issue affecting people the world over.
Malacañang on Monday called for a more thorough investigation into the questioned flood control projects in Taguig…
The defense on Monday backed the move by senator-judges to exclude a prosecution witness who testified on the firearms…
Meanwhile, Recto’s bill, once passed, will impose a 5 percent income tax for companies with a taxable income of not more than P400,000, to as much as P1.4 million plus 25 percent of the excess over P8 million for those with a taxable income of more than P8 million.
The income-tier based method is similar to the manner that individuals are taxed, as “like an individual taxpayer, a corporate taxpayer should be afforded a system of income taxation based on its ability to pay,” Recto wrote in the explanatory note for the bill on pushing for a progressive taxation system.
“Under the Revised Corporation Code, a duly organized corporation is clothed with a personality separate and distinct from the persons composing it. Therefore, being a juridical person, a corporation is recognized by law as a person similar to a natural person,” he said.
The Philippine Exporters Confederation Inc. has voiced support for the bill, saying it will be beneficial to micro, small and medium enterprises who will have lower CIT than the 20 percent proposed under Citira.
