Electronics exporters, who largely account for the country’s exports, are willing to pay more for a tax that has subsequently made their operations easier through the years sans meeting any red tape nightmare.
In a briefing on Thursday, the Semiconductor and Electronics Industries in the Philippines Foundation Inc. (Seipi) aired reservations on the second tax reform package, or the Tax Reform for Attracting Better and High-quality Opportunities (Trabaho) bill, which removes the 5-percent gross income earned tax. Companies in economic zones pay this in lieu of local and national taxes, shielding them from unnecessary bureaucratic processes.
“We are open to increasing the 5-percent [rate] today [and bring it] to the 6-7 percent range,” Danilo Lachica said.
Seipi’s compromise is similar to the position of the Philippine Economic Zone Authority (Peza). Peza Director General Charito Plaza earlier said they were willing to increase the rate to 7 percent.
Such an incentive is part of Peza’s pitch to attract companies to locate in economic zones. Outside these hubs, companies pay a higher corporate income tax.
“We also understand the responsibility of our member companies as corporate citizens to support the government’s initiative … We’re not really the bad guys here,” he said, explaining why Seipi would accept any form of increase.