‘No chance of Senate approving Citira’
Credit to Author: Tyrone Jasper C. Piad| Date: Thu, 21 Nov 2019 16:16:19 +0000
THE Senate will not pass the proposed Corporate Income Tax and Incentives Rationalization Act (Citira) in its current form, according to the American Chamber of Commerce in the Philippines (AmCham).
On the sidelines of a forum in Pasay City on Thursday, AmCham Executive Director Ebb Hinchliffe expressed doubt about the bill’s passage, saying if this “is presented to the Senate and voted up or down, it will be down.”
“If they can tweak it (Citira) a little bit and add a few more, I think it can be done in a few weeks,” he added, but voiced worry that there would be not enough time to revise the measure because of the forthcoming Christmas holiday.
Hinchliffe also believes that only a few senators are backing Citira.
The second package of the government’s Comprehensive Tax Reform Program, the bill formerly known as the Tax Reform for Attracting Better and High-quality Opportunities measure aims to reduce corporate income tax (CIT) from 30 percent to 20 percent in 10 years. It also seeks to remove the 5-percent tax on gross income earned currently enjoyed by select firms.
With time running out this year, Hinchliffe said investors would continue to worry over uncertainties Citira raises until next year or until it was passed.
This would take a toll on foreign investments, he warned.
“Every day of delay is a day of lack of investments. The longer it goes on, [the greater] it benefits other Asean [members] instead of the Philippines,” the AmCham official said, referring to the Association of Southeast Asian Nations, which includes Indonesia, Malaysia, Singapore, Thailand and Vietnam.
In the first nine months, foreign pledges registered with the Board of Investments soared to P239.9 billion in 2019 from P33.6 billion last year.
“If we can just reach a few compromises on the status of current investors and reach a few compromises about future investments, [then] we got a deal,” Hinchliffe added.
Julian Payne, president of the Canadian Chamber of Commerce of the Philippines, said that while he supports reducing the CIT, the 10-year transition is “too slow.”
“We strongly support the reduction to 20 percent, which is the Asean average. The real question now is how quickly it happens,” Payne said.
“After six years, we’ll still be the highest in the Asean,” he added.