Some European firms put on hold projects in PH
A European firm has put its P25-billion manufacturing project on hold due to uncertainties over the current tax incentives in the Philippines, a top official of the European Chamber of Commerce of the Philippines (ECCP) said.
This is probably the biggest of the investment projects of European firms in the Philippines that have been put on hold due to the incentives issue, said ECCP executive director Florian Gottein.
“I know personally only a handful of companies [that are on a wait-and-see mode] but I think there might be more out there. Personally, [I know] less than 10 (companies),” he said on the sidelines of a briefing last week.
The largest, he said, involved P24 billion to P25 billion in investment.
Further information about this company and the project, however, were not disclosed due to the sensitivity of the information. Nevertheless, this marks a potential loss in an investment opportunity over the uncertainty over tax perks.
ECCP, like other foreign business chambers, has expressed its reservations about the Tax Reform for Attracting Better and High-quality Opportunities (Trabaho) bill, the second tax reform package being pushed by the Duterte administration.
Critics say the bill creates uncertainty among businesses that have set up shop in the Philippines so they can export to other countries, whether they are manufactured goods or services particularly from business process outsourcing firms.
The Trabaho bill seeks to lower the corporate income tax while rationalizing tax perks. Its provision for the lowering of corporate income tax in 10 years and change tax perks abruptly drew criticisms from different industries and even some lawmakers.
In the press briefing last week, Gottein said some investors were putting their investments on hold “up to the middle of the year,” or around the same time when the current session in Congress was expected to end to make way for elections.
It is unclear, however, if the investments would still push through here in the Philippines or move elsewhere, especially since the government might just revive the Trabaho bill later.
