A reduced corporate income tax (CIT) rate is expected to start as early as July following the repackaged Corporate Income Tax and Incentives Rationalization Act (CITIRA) to the Corporate Recovery and Tax Incentives for Enterprises Act (CREATE) which is favorable to Congress.
Acting Socioeconomic Planning Secretary Karl Kendrick Chua bared such development as he noted on the program being part of the government’s planned recovery phase from the pandemic.
“This is the first time that the Department of Finance is proposing to reduce the taxes across the board. Currently, from the 30 percent CIT, we will reduce it immediately to 25 percent,” Chua said during the first ever online Sulong Pilipinas on Thursday.
“To help small businesses in particular, we will enhance net operating loss carryover. So (their) losses today can be credited to the future and effectively lower their tax payments,” he added.
Finance Secretary Carlos Dominguez III likewise shared the same sentiment as he stressed on the Philippines being a “laggard” in terms of attracting investments due to factors such as weak infrastructure along with stringent foreign ownership issues and the one size fits all incentives program.
“I would rather think that if you really want to attract companies that you really want, we have to first identify what are the industries that we want to bring in…instead od waiting for them to come and apply, we have to ask them what they need for them to invest (in us),” Dominguez said.
“We should be able to tailor fit to the needs of the companies that we want to bring them here rather than making a one size fits all incentives package for (everybody),” he added.