Electronic exports, which historically account for around half of goods delivered abroad, could risk its competitiveness should lawmakers insist on charging value added taxes (VAT) on local suppliers, an industry official said.
The Semiconductor and Electronics Industries in the Philippines Inc. (Seipi), the country’s largest organization of foreign and Filipino electronics firms, told the Inquirer they filed a position paper last month against a provision in House Bill 4774, or the Tax Reform for Acceleration and Inclusion Bill.
Local suppliers are currently enjoying tax exemptions.
“VAT on local suppliers of electronics companies would increase their costs and reduce competitiveness versus foreign suppliers. This may not bode well for local industries and could just increase imports and the trade deficit,” said Seipi president Danilo Lachica in a text message last week.
At this point, he said Seipi would still maintain the electronics export target of 5 to 6 percent growth this year.
The position paper was submitted to House ways and means committee chair and Quirino Rep. Dakila Carlo E. Cua and to the Philippine Economic Zone Authority.
The export industry missed its 2 to 5 percent growth target last year. It even slid 0.1 percent.