Hope springs eternal: Citira may still pass before Congress’ Holy Week break
The Senate version of the Duterte administration’s second tax reform package for corporate income may still pass before Congress takes a Holy Week break on March 13.
This likelihood was seen as the Senate committee that hammered out its report on the bill was able to address foreign businessmen’s fears that a review and reform of tax incentives could lead to capital flight and job losses.
Sen. Pia Cayetano, chair of the ways and means committee at the Senate, last Wednesday (Feb. 19) sponsored the committee report for Senate Bill No. 1357 on the Senate floor. It was the chamber’s version of the Corporate Income Tax and Incentives Reform Act (Citira).
Finance Secretary Carlos G. Dominguez III said while there were differences in the Senate and House versions of the package, he was “thankful that both versions, by and large, agree that the proposed system of corporate tax incentives has to be performance-based, targeted, time-bound and transparent.”
He said the Senate version addressed “many stakeholder concerns” which included the one-stop shop feature of the Philippine Economic Zone Authority.
It also addressed concerns on power costs, footloose firms and activities and sunset periods for corporations to continue enjoying tax perks, said Dominguez.
“The Senate version has made these adjustments while remaining consistent with the key principles of tax reform,” Dominguez said.
The Senate bill sought to cut corporate income tax by 1 percentage point every year until it reaches 20 percent by 2029 from currently 30 percent, the highest in Southeast Asia.
The Department of Finance (DOF) said the bill would also allow qualified projects to enjoy 2 to 4 years of tax holiday on top of another 3 to 4 years of special tax rate which is 8 percent of gross income in 2020, 9 percent in 2021 and 10 percent in 2022 in lieu of all taxes.
The special tax rate may be “extended by three or four years at a time for a maximum of 12 years,” the DOF said.
The Senate version, said the DOF, extended the sunset period for companies to pay 5 percent gross income tax in place of all taxes to seven years for companies that export 100 percent of output, employ at least 10,000 Filipinos and are outside Metro Manila, among other requirements.
Cayetano had told reporters that while she would not pressure her colleagues to act on the bill before the Holy Week break, a number of senators was supporting the package and “misconceptions” about Citira had been cleared up.
“I assure you that there would be no job losses,” said Cayetano.
“If we schedule this regularly, we could have a very good chance of passing. We do have a good chance,” the senator said.
Edited by TSB
Subscribe to INQUIRER PLUS to get access to The Philippine Daily Inquirer & other 70+ titles, share up to 5 gadgets, listen to the news, download as early as 4am & share articles on social media. Call 896 6000.