The Joint Foreign Chambers of the Philippines (JFC), whose members have more than $30 billion worth of investments in the country, is asking lawmakers to exempt the Philippine Economic Zone Authority (Peza) from a move to rationalize tax incentives.
In a statement, the JFC said it was supporting calls to exempt Peza from House Bill 4157, also known as the Comprehensive Income Tax and Incentive Rationalization Act (Citira).
The group said the Philippines was not benefiting from Chinese firms that were looking for new investment locations to avoid the impact of the US-China trade war, as it cited the uncertainty that had been pulling back foreign firms from investing here.
The Citira bill is the second tax reform package of the Duterte administration. It seeks to rationalize the tax incentives offered by investment promotion agencies such as Peza to prospective investors.
The bill, formerly called the “Trabaho” bill, would also lower corporate income tax rate, now the highest in Southeast Asia.
The Peza is specifically opposing the bill’s provision that will remove the 5-percent gross income earned (GIE) tax that companies in ecozones pay in lieu of local and national taxes.
The JFC said that it was supporting the call to amend the Citira bill “to exempt Peza” because this would preserve the decades-long gains the agency had made as a competitive option for investors seeking new homes for their projects.
The joint chamber said more that 3,000 foreign firms were located in ecozones under Peza.
It said that such an amendment would remove the uncertainty “that has deterred the entry of new foreign investments into the Philippines.”
Investment pledges registered under Peza fell by 40.97 percent in 2018 due to uncertainties in the country’s policies.
The JFC is a coalition of the American, Australian-New Zealand, Canadian, European, Japanese, Korean chambers of commerce, and Philippine Association of Multinational Companies Regional Headquarters Inc. (Pamuri). They represent more than 3,000 companies.