By Bernie Cahiles-Magkilat
The Philippine Economic Zone Authority (PEZA) and its export-oriented locators have finalized the set of refinements to the proposed Corporate Income Tax and Incentives Rationalization Act (CITIRA) bill.
PEZA Director-General Charito B. Plaza said the proposed changes were done after holding a second dialogue with its top sector locators, industry associations, and foreign chambers on Tuesday at the PEZA office.
The compromise centered on the transition period for companies to migrate to the corporate income tax regime from the 5 percent tax on gross income earned, incentive granting powers of the Fiscal Incentives Review Board, grandfather rule, respect of contract of existing PEZA locators, and the inclusion of indirect exports in the new incentives system.
Presiding the discussion, Plaza consulted the ecozone locators and companies registered with PEZA for its proposed amendments. Plaza also affirmed support to the proposed amendments to the House-approved version of CITIRA, which is now being deliberated by the Senate.
“PEZA wants to end the agony of uncertainties which has created fears to industries’ possible exits and the massive job losses, affecting peace and prosperity in the country,” said Plaza.
Industry associations, locators, and foreign chambers have agreed to get their heads in the game to end the uncertainties being caused by the pending tax reform on incentives since 2017 up to present, she said.
But key leaders of chambers, industries, and associations have reiterated that “incentives are important factors for continuously attracting investments in the country despite the absence of other efficiency factors including low supply chain, high-power rate, and logistics costs.”
“CITIRA is considered as a major incentives revamp which will affect PEZA’s image and credibility in the international community, in honoring commitments and contracts with investors, the stability of our investment policies and laws and most is the trust and confidence of investors to our government,” Plaza explained.
“Meanwhile, industry associations and foreign chambers have decided to continue with their lobbying to the senators, the Bicameral Conference Committee, and to the President for an enhancement of incentives to make the Philippines globally competitive with a very strong competition among countries to attract foreign direct investments and a longer transition period of 15 years to assure an ROI of their capital investments,” added Plaza.
With that, Plaza has appealed for more transparency, openness, and a critical evaluation by the Senate.