By Hannah L. Torregoza
Senator Imee Marcos on Sunday welcomed plans to review the proposed Corporate Income Tax and Incentive Rationalization Act (CITIRA) in light of the COVID-19’s effect to the country’s economy and investment program.
Sen. Imee Marcos
(Senate of the Philippines / FILE PHOTO / MANILA BULLETIN)
In an interview over GMA News TV, Marcos said there is a need to tinker with the current version of the bill before it is passed into law in order to generate a better investment climate in a post-COVID-19 scenario.
The measure, Senate Bill No. 1357, primarily seeks to rationalize tax incentives and has been certified urgent by President Duterte last year.
“We need to fix it, harmonize it a little because of this development on COVID. I believe we need to amend it,” said Marcos, who chairs the Senate committee on economic affairs.
Marcos said she believes passing the current version of the bill could eventually force major industries in the country to close and trigger foreign investors to leave and set up shop elsewhere or in neighboring Asian countries.
The bill, which is being pushed by Sen. Pia Cayetano, chair of the Senate ways and means, particularly seeks to rationalize the fiscal incentives currently being enjoyed by some industries.
Under Cayetano’s version of the bill, corporate income tax (CIT) rates will drop by one percentage point every year—from the current 30 percent, down to 20 percent by 2029.
“I do believe we need to push for CITIRA. First of all, we need to lessen the tax rates for corporations. That is one incentive we can give because we have the highest tax in the region which is at 30 percent, while the other countries are only at 19 percent,” Marcos stressed.
“If we lessen the incentives, we might lose investors in the long run. These business process outsourcing (BPO) companies and exporters may move out,” she pointed out.
The senator also said the government should take advantage of adjusting policies under the proposed CITIRA to help those in the travel and tourism industry and those in the manufacturing sectors who were greatly affected by the COVID-19 crisis.
For one, she said the Philippines can attract investors who have decided to leave China amid the global pandemic.
“These developments are very, very big changes. We need to take the opportunity to make (the bill) work,” Marcos said.
“I think there is still good news on the horizon for the economy. We (the Philippines) and other countries have discovered that we cannot just rely on China,” Marcos pointed out.
“So let’s look at CITIRA once again, take advantage of the opportunity of those leaving China and at the same time, let’s give a chance to the companies that are struggling during these hard times. Let’s not tax them too much,” she said.
Earlier, Cayetano assured that the Senate will “be back on the drawing board” to amend the CITIRA to ensure that incentives would still be given to industries that the Philippines needs in its fight against the COVID-19 pandemic.
Cayetano also said lawmakers will ensure that the CITIRA will complement the government’s move to encourage more Filipinos to embrace the “Balik Probinsya” program and relocate to provinces to decongest Metro Manila where there are higher cases of COVID-19.