Firms leaving China seen skipping PH
The European Chamber of Commerce of the Philippines (ECCP) warned Thursday that the country risked losing potential investments to its neighbors in the Association of Southeast Asian Nations (Asean) if the government would not adjust the current taxation system that has been a drag to the competitiveness of the local business environment.
“We have to bring the Philippines forward. The government now has limited time to approve economic legislation and institute reforms. If we do not address the issue now, companies will be going to Vietnam and not here,” ECCP president Michael Raeuber said.
“The ECCP has been encouraging European businesses to invest in the Philippines. We are also working closely with Philippine exporters not just to Europe but to other countries. There is a need to see some action,” he added.
According to Raeuber, the Philippines must be competitive enough by offering the right set of incentives and tax system if it wanted to tap the companies that were planning to leave China and convince them to relocate to the Philippines. Many of these companies, however, were considering Vietnam as their preferred destination.
Marikina Rep. Romero Quimbo was earlier quoted as saying that it made good economic sense to completely overhaul the country’s corporate and individual income taxes in order to be competitive amid the impending establishment of the Asean Economic Community (AEC).
Such a move might especially prove to be critical in attracting more foreign investments in the agriculture and manufacturing sectors to achieve inclusive growth. Otherwise, the country might lose out to Thailand, Vietnam and Cambodia, he added.
According to Quimbo, the tax bracket rates have not been adjusted since 1997 with 86 percent of income taxes being shouldered by only 16 percent of the population.
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