DoF allays investor fears over incentives reform
Credit to Author: MAYVELIN U. CARABALLO, TMT| Date: Tue, 23 Apr 2019 16:20:47 +0000
Better tax perks were assured to Japanese firms by the Department of Finance (DoF) to encourage them to invest more in the Philippines.
The DoF said it recently assured Japanese investors that the second package of the Duterte administration’s tax reform program, which aims to cut the corporate income tax (CIT) rate and rationalize investment incentives, would be a game-changer that would expand, rather than curtail, opportunities for them to do business in the Philippines.
In a statement on Tuesday, the DoF quoted Finance Secretary Carlos Dominguez 3rd as saying, during a meeting with a delegation from the Osaka-based Kansai Economic Federation last March 11, that “we would like to point out that actually, our economy is growing very quickly. If you want to participate in the local economy, you have to better invest here.”
“Rather than look at the effect of tax reform on some companies, look at the effects of tax reform on the entire economy because it is making it better. Instead of looking at the place where you might lose, look at opportunities in the larger economy,” Dominguez added.
Fiscal incentives under the tax reform program, he pointed out, would not be removed but instead be rationalized or improved to ensure these are performance-based, targeted, time-bound and transparent.
“There is no danger that we are abandoning fiscal incentives. But as I described to you, it is really necessary for us to rationalize it. I hope for your understanding and support because we certainly don’t want to hurt companies that are making a good contribution to Philippine society,” he added.
Dominguez also assured the delegation that the “one-stop shop” Japanese investors were currently enjoying through the Philippine Economic Zone Authority would not only be retained but would also be the norm for all business applications in the future, following the signing into law of the Ease of Doing Business Act last year.
“Everything that makes biz easier, we will keep and we will improve,” he said.
Dominguez said the government likes Japanese investors to feel welcomed by improving disposable income of the people, infrastructure and peace and order in the country.
“Following the example of Japanese policies implemented in the ‘50s, we are investing very heavily in infrastructure with the generous help of your taxpayers,” he said, referring to Japan’s funding support for the “Build Build Build” program.
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