Finance Secretary Carlos G. Dominguez III on Wednesday (March 11) conceded that the Senate could no longer pass the proposed Corporate Income Tax and Incentives Reform Act (Citira) before Congress goes on Lenten break.
But he expressed optimism that the tax package, the second in a set of sweeping reforms being put in place by the Duterte administration, would finally be passed by the Senate when Congress resumes session in May.
Citira seeks to put sense into fiscal incentives that investors enjoy while gradually pruning the Philippines’ corporate income tax rates, which are currently the highest in Southeast Asia.
Congress will go on a Holy Week break starting on March 13 and resume session on May 4.
To contain COVID-19, the Senate had already suspended sessions this week although a key inquiry of the blue ribbon committee on alleged money laundering by Philippine offshore gaming operators (Pogos) will proceed as scheduled on Thursday (March 12).
President Rodrigo Duterte had certified the Senate version of Citira, SB No. 1357, as urgent.
Last week, the Philippine Stock Exchange (PSE) expressed support for Citira, saying it would “make the Philippines an attractive investment destination.”
Citira, the PSE said, would also “encourage existing companies to expand their operations.”
“All these will redound to job creation, higher income increased spending and more money in circulation,” the PSE said.
It added that these benefits could be “a cycle that can continue indefinitely as a result of the multiplier effect.”
The country’s biggest business groups had also pushed for the passage of SB 1357, which already included some refinements they had previously proposed.
The business groups said “we strongly believe that passing the law will provide long-delayed certainty that will help the Philippines compete for job-creating investments.”
The statement of support was attributed to business groups Anvil Business Club, Bankers Association of the Philippines, Federation of Filipino Chinese Chambers of Commerce and Industry, Inc., Financial Executives Institute of the Philippines, Foundation for Economic Freedom, Makati Business Club, Management Association of the Philippines, Organization of Socialized Housing Developers of the Philippines, Subdivision and Housing Developers Association, and UP School of Economics Alumni Association.