Exporters push for immediate corporate income tax cut

The umbrella organization of exporters in the country is pushing for the passage of a bill immediately reducing corporate income tax (CIT) rate to 20 percent with no condition to make the country at par with Southeast Asian neighbors.

Philippine Exporters Confederation Inc. (PHILEXPORT) President Sergio Ortiz-Luis Jr. said the group strongly supports the Corporate Income Tax bill of Senator Ralph Recto which proposes taxpayer segmentation.

“(This) will help MSMEs (micro, small and medium enterprises) enjoy even lower tax rates than the proposed 20-percent CIT,” he said.

Ortiz-Luis said the group also recommended the removal of the performance threshold to avail of incentives, such as tax refunds for start-ups and MSME.

Recto filed the Senate Bill 595, otherwise known as an Act instituting income tax reform for corporate taxpayers, which seeks to lower the corporate income tax rate from the current unitary or single income tax rate of 30 percent with graduated rates ranging from 5 percent to 25 percent.

In the Association of Southeast Asian Nation (ASEAN), the Philippines has the highest corporate income tax rate at 30 percent, while the average corporate income tax rate is at 22.4 percent in the region, it said.

A new version of the proposed Comprehensive Income Tax and Incentives Rationalization Act (CITIRA) is set to be filed at the Senate as stakeholders in the government sector seek a “win-win” type of support for industries.

The second package of the comprehensive tax reform program, CITIRA reduces corporate income tax from 30 percent to 20 percent over 10 years.