Sen. Pia Cayetano on Wednesday sponsored on the Senate floor a bill seeking a definite end to tax perks given to investors in the Philippines, a priority of the Duterte government.
Senate Bill No. 1357, or the proposed Corporate Income Tax and Incentives Rationalization Act (Citira), also seeks to reduce the corporate income tax to 20 percent by 2030.
Cayetano said the bill would make fiscal incentives “performance-based, time-bound, targeted, and transparent.”
The bill provides sunset provisions for firms already enjoying fiscal incentives.
Priority business activities to be given incentives are those that generate domestic employment; promote research, development and innovation; promote agribusiness; and invest in areas that are less developed or are recovering from disasters and conflicts, among others.
Citira also allows tax deductions to reward corporations’ good behavior, such as local job creation, exports, and investment in high technology.
“After listening to the concerns and apprehensions of existing investor groups that will be affected by this bill, we came up with terms that address their request for a smoother transition period. This addresses our objective, which is to keep companies and investors here in the country while rationalizing the incentives that we give them,” Cayetano said in her sponsorship speech.
Cayetano said the bill sought to expand the functions of the Fiscal Incentives Review Board (FIRB), which grants incentives to government-owned or controlled corporations. Citira will require FIRB to approve all incentives, including those given to private companies, as recommended by the different Investment Promotion Agencies (IPAs).
“Currently, there are 13 different IPAs… that offer different menus of incentives to various industries, sometimes not in line with national priorities… There is no one simple set of incentives that the country may promote to potential investors,” Cayetano said.
The measure allows the president to grant incentives for a longer period of up to 40 years for “highly desirable projects,” as long as they will primarily benefit the Filipino public, she said. (PressONE.ph)