BusinessWorld – March 9, 2020 | 10:36 pm
The measure lowering the corporate income tax (CIT) and streamlining fiscal incentives was certified as urgent Monday by President Rodrigo R. Duterte.
In a letter to Senate President Vicente C. Sotto III dated March 9, Mr. Duterte informed the chamber that Senate Bill No. 1357, or the proposed Corporate Income Tax and Incentives Rationalization Act (CITIRA) is deemed an urgent measure.
The tax bill is intended to “promote foreign direct investment inflows and the expansion of business ventures conducive to economic growth and job generation,” the President said in the letter.
The certification allows the Senate to approve a measure on second- and third reading on the same day, doing away with the required three-day interval.
CITIRA is currently being considered by the Senate in plenary session, with two session days remaining before Congress goes on a seven-week break between March 13 and May 3.
The bill will gradually reduce the CIT to 20% by 2029 from the current 30% and grant an income tax holiday of two to four years. After the tax holiday, qualified companies will have to pay a special corporate income tax of 8% this year; 9% in 2021; and 10% in 2022 based on gross income earned (GIE), in lieu of all national and local taxes.
Senate President Vicente C. Sotto III has said the measure may be set aside in favor of measures to deal with the coronavirus outbreak.
The Philippine Economic Zone Authority (PEZA) has also asked the chamber to delay the passage of the CITIRA as exporters are affected by the outbreak.
“Ang aming pakiusap sa Senado wag po natin i-railroad ang CITIRA (Many have called on the Senate not to railroad CITIRA) but to carefully study it because our export industries, clients of PEZA, are the most affected,” Director General Charito B. Plaza said during a Senate Economic Affairs Committee hearing Monday.
The Action for Economic Reform (AER) called PEZA’s position as a “most reckless, most irresponsible act.”
“The main reason behind the lacklustre investment performance last year was the investor uncertainty created by the needless delay in the deliberations on CITIRA. Investors just want to know what the final rules are, and they will immediately make investment decisions,” AER coordinator Filomeno Sta. Ana III said in a statement Monday.
The measure forms part of the administration’s comprehensive tax reform program, alongside the proposals to simplify the tax structure for financial instruments, provide a uniform framework for real property valuation and assessment and increase the government share from the mining revenues.
The government has so far enacted a tax measure that slashed personal income tax rates and increased or added levies on several goods and services — the main component of the tax reform package — and another one that grants estate tax amnesty and amnesty on delinquent accounts left unpaid after final assessment. It has also moved to increase excise taxes on alcohol products and conventional and electronic cigarettes. — Charmaine A. Tadalan
Source: https://www.bworldonline.com/palace-certifies-citira-as-urgent/