By Hannah Torregoza
The proposed Corporate Income Tax and Incentives Rationalization Act (CITIRA) could be used to complement the “Balik Probinsiya” program of the government.
Senator Pia Cayetano, chair of the Senate ways and means panel, said CITIRA, a measure certified urgent by President Duterte, aims to encourage investments and generate employment in the countryside and thus could help decongest urban centers in the Philippines.
The measure seeks to lower corporate income tax from 30 percent to 20 percent over the next 10 years and expand the authority of the Fiscal Incentives Review Board (FIRB) to approve incentives given to multi-national companies.
“People tend to forget that CITIRA is (about) rationalizing fiscal incentives. They tend to think that it’s (just) about taking away incentives, when from the start I kept on emphasizing that it’s about granting incentives in the right places,” explained Cayetano, the sponsor of Senate Bill No. 1357.
In granting incentives to industries geared towards rural development, Cayetano said CITIRA could very well complement Sen. Christopher “Bong” Go’s proposal to fast-track the ‘Balik Probinsya’ program to decongest the country’s capital amid the COVID-19 outbreak.
Cayetano said she agrees that areas within the National Capital Region (NCR) and other metropolitan centers are already too highly populated while there are safer spaces in the provinces.
“But the reality is we also need job opportunities there so people will be encouraged to move. That’s where the FIRB can incentivize businesses that would be put up (in the regions),” Cayetano pointed out.
Late last year, the Philippine Economic Zone Authority (PEZA) expressed their concerns about the proposed CITIRA law, especially on the plan to remove the fiscal incentives currently being enjoyed by multinational companies.
PEZA officials have said the measure will have a negative impact on investments and livelihood in the Philippines since the country is now reeling from the economic backlash brought about by the COVID-19 crisis.
Cayetano, however, said the Senate is willing to amend the CITIRA measure in light of the economic fallout from COVID-19.
“The incentivized programs should be reviewed at this point in time so that we can really prioritize industries that can generate employment and income,” she said.
She added that CITIRA, once passed into law, will also be used to support businesses investing in products and services that the country needs to fight COVID-19 and future pandemics.
“The structure envisioned in CITIRA is a structure allowing the FIRB to determine where we will be granting incentives,” she said.
“Since there is a new situation now, we can incentivize companies that are investing in products that would make us self-reliant (in this time of COVID-19), like mass-producing our own personal protective equipment (PPEs),” Cayetano said.
Cayetano also said she will discuss the measure again with state economic managers, especially now that the National Economic Development Authority (NEDA) has a new chief.
“NEDA has a new secretary. We need to talk. Let’s leave it at that,” the lawmaker said, referring to former Finance Undersecretary Karl Chua, who was recently appointed socioeconomic planning secretary.