House approves CITIRA bill on final reading

Published September 13, 2019, 6:57 PM

by Dhel Nazario, Jeffrey G. Damicog, and Rey G. Panaligan

By Ellson Quismorio

The House of Representatives approved on third and final reading Friday House Bill (HB) No.4157, the proposed Corporate Income Tax and Incentive Rationalization Act (CITIRA).

On a vote of 261 to 18, the Senate and the House of Representatives decide to extend martial law in Mindanao up to December 31, 2017 in a joint, special session at the Batasang Pambansa yesterday. Inset photo shows Senate President Aquilino Pimentel III (left) and House Speaker Pantaleon Alvarez presiding over the session that lasted more than seven hours. (Jansen Romero, Alvin Kasiban)
House of the Representatives (Manila Bulletin File Photo)

CITIRA, formerly dubbed the Tax Reform for Attracting Better and High-Quality Opportunities (TRABAHO) bill received 170 “yes” votes from congressmen during nominal voting. Eight House members, mostly from the militant Makabayan Bloc which is part of the Minority, voted “no”. Six House members abstained from voting.

CITIRA represents the second package of the Duterte administration’s Comprehensive Tax Reform Program (CTRP), which began with the implementation of the Tax Reform for Acceleration and Inclusion (TRAIN) law in January 2018.

The main feature of the new measure is the gradual reduction of the Philippines’s corporate income tax (CIT) beginning 2021, bringing the current rate of 30 percent down to 20 percent by 2029.

It also limits fiscal incentives given to select firms by removing the option for corporations, including resident foreign corporations, to avail themselves of the 15-percent gross income tax.

Majority Leader and Leyte 1st District Rep. Martin Romualdez said the House leadership, led by Speaker Alan Peter Cayetano, has been working very hard to pass pending measures aimed at establishing a better investment climate in the country to generate more jobs for Filipinos, CITIRA being one of them.

“The 18th Congress will step up to the plate. Lifting Filipinos out of poverty is the top priority of President Duterte in the next three years through meaningful programs,” said Romualdez, who chairs the powerful Committee on Rules.

It was only last Monday when HB No.4157 was passed by the House on second reading via simple voice vote.

On Friday afternoon, House members momentarily shelved its plenary debates on the proposed P4.1-trillion General Appropriations Bill (GAB) for 2020 or national budget to give their final nod on CITIRA.

Deputy Speaker for Finance and Camarines Sur 2nd District Rep. LRay Villafuerte said CITIRA will level the playing field for some 90,000 small and medium enterprises (SMEs) through the gradual lowering of the country’s CIT, which is the highest in the region.

SMEs, which employ most of the country’s workforce, currently pay the regular CIT rate of 30 percent while some 3,000 bigger corporations favored by state-run investment promotion agencies (IPAs) pay a discounted rate of 6 percent to 13 percent tax on their net incomes.

“These big firms, many of them in the list of the top 1,000 corporations in the country, can well afford to pay the regular tax rate yet they get to enjoy hundreds of billions of pesos in tax breaks yearly… The CITIRA bill will eliminate this unfair practice, and put in place a better system that will be fair to all businesses. The new system will encourage firms to innovate, create more jobs, invest in skills training, and new technologies,” said Villafuerte, an author of the measure.

Albay 2nd District Rep. Joey Sarte Salceda, Committee on Ways and Means chairman, had earlier called HB No. 4157 “the most significant economic legislation in 34 years.”

“CITIRA will result in an incremental GDP (Gross Domestic Product) growth of 3.6 percent annually while adding only 0.9 percent to inflation,” Salceda said. “It sets the platform to pursue a better future for the next generation of Filipinos,” he added.

“We rationalize incentives so they could be targeted to investments that could generate more investments and more jobs,” Salceda further said.

But not everyone is thrilled with CITIRA’s passage.

Gabriela Party-List Rep. Arlene Brosas described the tax measure as “patently pro-rich” and “regressive.”

“Walang kongkreto at direktang benepisyo ito na maidudulot sa mga kababaihan at mamamayan (This gives no concrete or direct benefit to women or the people)…Worse, [CITIRA] allows the President to award land rights and water resources and grant power subsidies to ecozone locators supposedly as part of the incentives, taking away whatever is left for Filipinos,” she said.

Albay 1st District Rep. Edcel Lagman dismissed CITIRA as a mere replica of the TRABAHO bill.

“This ‘Trabaho’ brand was abandoned by the current House Bill No. 4157 which is labeled CITIRA. This is an indirect admission that CITIRA will not generate employment even as the Explanatory Note to the CITIRA Bill does not mention the generation of jobs,” Lagman said.

“The sponsoring committee’s suggestion that the savings that corporations will obtain due to the reduction of their income tax rate will be channeled to recruitment and employment of more workers is at most speculative.

“The sponsoring committee admitted that the government has no control over what corporations would do with their windfall savings consequent to their corporate income tax reduction. These savings will more likely be considered by corporations as additional profit for the dividend distribution or for repatriation as the case may be,” he added.

 
CLICK HERE TO SIGN-UP
 

YOU MAY ALSO LIKE

["news"]
[2161108,2534630,2485825,2408462,2358243,2358052,2344118,2339143,2047660,1998697,996820,995332,995948,995006,994327,994303,993947,993860,993770,993529,993383,993285,798318,2770788,2770784,2770781,2770776,2770770,2770734]