Plaza doesn’t think she’s getting fired
The head of the Philippine Economic Zone Authority (Peza) stood her ground on Wednesday despite speculations that Duterte might be planning to fire her.
President Duterte said in a speech on Tuesday that he would fire another official because of poor performance. Although he did not mention any name, he said this was a female official handling economic affairs.
This triggered speculations that Duterte might be referring to Peza Director General Charito Plaza, who had been at odds with the Department of Finance (DOF) and the Department of Trade and Industry (DTI) over the move to rationalize tax incentives.
Plaza called for a press briefing on Wednesday morning, where she was for the first time joined by top officials of industry groups who had member companies located in economic zones.
She did not give a straight answer when asked if the briefing was prompted by the President’s announcement. She said she did not think Duterte was referring to her.
“I don’t feel I am the one being alluded to because I’m just doing my job and my responsibility,” she said.
But at the same time, she recognized the risk of voicing out Peza’s reservations on the second tax reform package of the Duterte administration, now called the Comprehensive Income Tax and Incentive Rationalization Act (Citira).
Citira will lower the corporate income tax while rationalizing tax incentives. Peza wants to be exempted from the rationalization of tax incentives, which, it said, might drive up the cost of doing business for manufacturers and call centers.
“I am facing this risk not because of my personal interest. If it is about personal interest, I will keep my mouth shut to keep my job. I am doing this, I am facing all this risk, because I want to protect the interests of the Filipino people,” she said.
She said she had reached out to Sen. Christopher Lawrence “Bong” Go on Tuesday night, Duterte’s former special assistant who, to this day, remained close to the President. Plaza said she still wanted to have an audience with Duterte.
Duterte also said the official he would fire had not been at par with others “in terms of performance.”
If this was Plaza, Duterte was probably referring to the investment pledges registered in Peza, which dropped last year to a record low while another agency granting tax perks, the Board of Investments (BOI), hit a record high.
But the two agencies are not necessarily comparable. Many of the companies that are registered in Peza are foreign firms that are looking for the most cost-efficient country for the exporting business. Tax incentives offset the costs of doing business for these companies in the Philippines.
With the US-China trade war, countries in Southeast Asia are trying to attract companies from both sides that want to avoid the trade war. This is where the importance of tax incentives plays in.
The Joint Foreign Chambers of the Philippines said the uncertainty was costing the country the opportunity to benefit from the trade war.
Thailand, for its part, recently announced a package of incentives, including a 50-percent cut in corporate tax, for companies relocating to Thailand.
“Investors are already here yet the feeling is we are penalizing them for investing in the country,” she said, referring to how the Citira bill would change the tax perks of existing firms despite earlier contracts.
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