Plans to rationalize perks for investors should be put on hold as the current regime is one of the best lures that Philippines has to attract foreign capital, according to the Israel Chamber of Commerce of the Philippines (ICCP).
ICCP counts 23 corporate members, although the group is also open to individuals, government, nongovernment and nonprofit organizations.
The group describes itself as “one of the fastest growing business chambers in the country” and is aiming to lengthen its roster of members to 100 companies by 2017.
Too soon to change scheme
ICCP president Itamar Gero said in a statement that it might be too soon for the country to overhaul the current investment regime.
“I am sure every sector will defend itself,” Gero said. “When the investment momentum is at its peak, then the Philippine government can think about sunsets on those incentives.”
He said Israeli companies would look for stability and the transparency in taxation and regulation before doing business in the Philippines, because, when they do, the investments “will not be small.”
“These are investments that will require stability in the long-term and we want attractive incentives to be sustained,” Gero said.
The ICCP particularly noted Senate Bill No. 229 sponsored by Sen. Franklin Drilon and which sought to streamline incentives being given by investment promotion agencies (IPAs) like the Board of Investments (BOI) and the Philippine Economic Zone Authority (Peza).
No more fiscal perks
Locators in Peza-administered zones currently enjoy a preferential 5-percent tax on gross income earned (GIE).
Gero said that if the bill were passed, Peza locators after four years will be subject to either the 5-percent GIE for the succeeding 11 years or a
15-percent corporate income tax (CIT)—instead of all national and local taxes except value added tax and real property tax.
He said that, as for investors registered with the BOI, the bill slapped them a 15-percent CIT and no income tax holiday in any form.
“All incentives will then become renewable as determined by the government’s IPAs,” Gero said.
Formed in 2009, ICCP was established from what used to be the Philippine-Israel Business Association.
The chamber’s mission is to encourage business-to-business networking within the Philippines and bilateral trade between the Philippines and Israel.
ICCP works closely with other foreign chambers in Manila and other Philippine business groups, particularly the Philippine Chamber of Commerce and Industry.