The Management Association of the Philippines (MAP) backs the Duterte administration’s second comprehensive tax reform package, calling it a “bold move” to improve competitiveness in the region.
This is according to a statement from the Department of Finance, which quoted a letter of the business group addressed to Finance Secretary Carlos G. Dominguez III.
The second tax reform package will lower corporate income tax to put it at par with those of other Asean countries, while rationalizing the tax incentive regime.
The package as filed in Congress as House Bill 7458, contained several features similar to the DOF’s Package 2 proposal.
“[Package 2] is another milestone initiative for the government and a bold move that we believe will create a positive impact overall. The MAP commits its continuing support for the passage of [Package 2],” the organization said in its letter dated March 7.
The MAP consists of some 1,000 members representing a cross section of CEOs and other top managers from the largest local and multinational companies operating in the Philippines.
“We agree with the DOF that [Package 2] will help the country become more competitive with the rest of the world by lowering the corporate income taxes from the current 30 percent, the highest among our Asean peers,” MAP said in the letter.
It also agreed with the DOF on “the need to rationalize and modernize the tax incentive system to make incentives time-bound, performance-based and not excessively complex with far too many different, even overlapping laws, rules and regulations.”
“It is necessary to widen the tax base and enforce better compliance. The relaxation of our bank secrecy laws, coupled with proper safeguards against abuse, is an essential tool in doing that. It will also encourage more to avail [themselves] of a general tax amnesty, which we support,” MAP said.
Underscoring the urgency of implementing corporate tax reforms, the MAP suggested that these be carried out starting in 2019, as “our Asean neighbors are contemplating even further reductions in their income tax rates—making this an important step.”
“We believe it is important to commit to a definite timeline for the reduction of income tax rates to have predictability that can help decision-making on investments and business plans,” MAP said.