MANILA -- Semiconductor and Electronics Industries in the Philippines, Inc. (SEIPI) Chair Melba Cuyahon said Wednesday that a reduced corporate income tax (CIT) rate of only 10%, inclusive of local business tax and real property tax is something that the local electronics industry truly "deserves." This, as she expressed support for the second package of government's tax reform program.
In a press conference during the Philippine Semiconductor and Electronics Convention and Exhibition (PSECE) 2018, Cuyahon noted that the proposed tax reduction is “very fair and competitive” for the electronics industry given the socioeconomic contribution of the sector.
She pointed out that the electronics sector contributes a huge share to the country's export revenues and job generation.
In the past years, the industry accounted for half of the total exports revenue of the country. The sector also created some 3.2 million direct and indirect jobs for Filipinos.
“We should really try to be competitive and maintain the semiconductor and electronics industry,” said Cuyahon.
She noted that SEIPI supports government's drive to generate higher revenues to fund infrastructure gaps in the country. But providing competitive fiscal incentives to investors would likewise help the government to boost its tax collection
This was also echoed by SEIPI Board Member Glenn Everett, who is also the general manager for Continental Temic Electronics Philippines, Inc.
“To encourage FDIs (foreign direct investments), to encourage more companies, to bring in more jobs, and the 10 times magnifier with local companies that support those businesses, companies that hire more people, this might have a dramatically increase effect on tax revenue for the government,” Everett said, commenting on the 10-percent CIT rate proposal of the SEIPI.
Earlier, SEIPI President Dan Lachica shared the group’s position paper on the Tax Reform for Acceleration and Inclusion (TRAIN) Package 2, which proposed a tax rate of 10 percent on CIT on a graduated basis of up to five years instead of a 15-percent CIT rate exclusive of other taxes as proposed by the Department of Finance (DOF).
The rate will be inclusive of local business tax and real property tax, as companies would prefer to deal with a system akin to Philippine Economic Zone Authority than dealing with different rules in local government units (LGUs), according to Lachica.
On the sidelines of the press conference, Lachica said the 10-percent CIT is a rate which electronics firms are "willing to live with".
He added that the DOF is “very receptive” to SEIPI’s proposal, but the business group would like to see its proposal in the final version of the TRAIN Package 2 bill.
Meanwhile, SEIPI formally launched its new industry roadmap during the PSECE. Under the roadmap dubbed as PATHS -- Product and Technology Holistic Strategy -- the industry eyes to hit the USD50-billion dollar revenue by 2030.
Last year, the industry registered its highest exports revenue of USD32.7 billion, back to its USD30-billion revenue level that was last reached in 2010 before the market slowed down in 2011. (PNA)
