A week-long break taken by the Senate purportedly for the Philippines’ hosting duties for the 30th Southeast Asian Games (Sea Games) is making it tougher to pass the Corporate Income Tax and Incentives Reform Act (Citira) measure by the end of the year, according to a ranking finance official who is the brainchild of most of the Duterte administration’s tax and fiscal reforms.
Finance Undersecretary Karl Kendrick T. Chua also said a Citira package, imposing higher taxes on alcoholic drinks, heated tobacco and vapes, was already in an “advanced stage” at the Senate—period of interpellation which is coming to a close.
Chua said he was optimistic that that package would pass by yearend and a bicameral committee of the Senate and House of Representatives would be able to reconcile their versions.
The other package, which reviews and adjusts corporate income tax rates, was more problematic as Chua said he doesn’t see it passing before Congress takes a Christmas break. The package seeks to lower corporate income tax from 30, the highest in Southeast Asia, to 20 percent.
Approval of this package by Congress, Chua said, “will be more challenging because of that one-week” break by the Senate.
Chua’s boss, Finance Secretary Carlos G. Dominguez III, told reporters last week he was still crossing his fingers that “there will be enough time for Citira” in Congress.
“There are very few days and there are lots of issues so that’s what might drag the implementation,” he said.
In a statement on Monday, Dec. 2, Dominguez again pushed for the Citira bill, saying it “will encourage more investments as well as induce better tax compliance.”
The second package, which would revise fiscal incentives, sought to turn these incentives into “performance-based, time-bound, specifically targeted and fully transparent” measures.
“To be clear, we are not eliminating fiscal incentives,” Dominguez said. “We want to keep granting incentives for the right reasons and for the right investments,” he added.