By Bernie Cahiles-Magkilat
Business groups yesterday stood behind the Senate version, Senate Bill (SB) No. 1357, of the Corporate Income Tax and Incentives Reform Act (CITIRA) saying it addresses concerns raised by businessmen and urged legislators for its immediate passage to end the business uncertainty created by the delays of this important tax reform measure.
In supporting the Senate version, the business groups said SB 1357 addresses refinements they had previously proposed.
These include the scheduled CIT rate reduction, which is fixed for the first five years to reduce uncertainty.
It also cited the extended transition period of seven years provided to certain firms under the gross income earned (GIE) tax regime to adjust their operations and prevent dislocation.
The Senate version also keeps the current one-stop shop approach for registered enterprises. This would allow them to deal with only one tax agency, in effect avoiding the inconvenience of going through difficult processes and different rules of local government units.
“This structure of the CITIRA under SB 1357 will help create an enabling environment for Filipino businesses, generate quality jobs, and spur growth that is felt throughout the entire archipelago. The passage of the law is a necessary step towards achieving the country’s shared vision of prosperity and a comfortable life for all Filipinos by 2040. It is also timely. The current disruptions in supply chains bring opportunities for the Philippines to attract foreign direct investments,” the business group said.
While there remain few key issues in the SB that need to be addressed, the business group said, “We strongly believe that passing the law will provide long-delayed certainty that will help the Philippines compete for job-creating investments.”
With that the businessmen urged the Senate and the House of Representatives to move quickly and decisively to push the CITIRA forward, and ensure its passage at the soonest possible time stressing, “The uncertainty over CITIRA must end.”
In general, businessmen support CITIRA as it seeks to reduce the corporate income tax (CIT) rate from 30 percent to 20 percent, a rate that will eventually put us within the ASEAN range, and at par with our closest regional counterparts Thailand, Vietnam and Malaysia.
“This move will not only make us more competitive in attracting foreign investments, but it will also make our domestic corporates more competitive as they expand their operations or bring their goods in the international market,” the group said in a statement.
They also said that CITIRA will modernize the fiscal incentives system.
“We believe in the underlying principles of having a tax incentives system that is transparent, performance-based, targeted and time-bound. We believe in the equitable sharing of the tax burden, as we believe in the equitable enjoyment of living in an orderly, healthy and prosperous society,” the statement added.
The statement of support was signed by Anvil Business Club, Bankers’ Association of the Philippines, Federation of Filipino Chinese & Industry, Inc., Financial Executives Institute of the Philippines, Foundation for Economic Freedom, Management Association of the Philippines, Makati Business Club, Organization of Socialized Housing Developers of the Philippines, Subdivision and Housing Developers Association, and UP School of Economics Alumni Association.