MANILA – Finance Secretary Carlos Dominguez III said on Wednesday he remains optimistic that lawmakers will approve Senate Bill (SB) No. 1357 or the proposed Corporate Income Tax and Incentives Rationalization Act (CITIRA) by March.
Dominguez said “another seven weeks (of waiting) won’t matter” since economic managers have proposed the reform on the country’s corporate income tax three years ago.
He is confident that any delay in the passage of the measure, which was endorsed by Senator Pia Cayetano, beyond March 13 will have “not that serious” impact on investors sentiments “but I hope that they can really finish it by March 13.”
Congress will go on recess starting March 13.
The measure aims to cut corporate income tax (CIT) rates by 1 percentage point annually from 30 percent to date to 20 percent by 2029.
Asked on the impact of the eventual passage of the measure on foreign direct investments (FDIs), Dominguez said the recent drop of FDIs is not an isolated case and traced this to the impact of trade war overseas.
“With the clarity (on the passage of the CITIRA bill) and with the other situations happening around the world, I think we can look at a very, very good move with CITIRA,” he said.
Dominguez added fiscal incentives are not the primary reason for investors’ decision to put their funds in a certain country but opportunities.
In a statement, Dominguez said “while there are differences in the House and the Senate versions of CITIRA, we are thankful that both versions, by and large, agree that the proposed system of corporate tax incentives has to be performance-based, targeted, time-bound, and transparent.”
He said the measure at the Senate “addresses many stakeholder concerns, including the one-stop shop feature of the Philippine Economic Zone Authority (PEZA), issues on power costs, provisions for footloose firms and activities, and the length of the sunset period for corporations to continue enjoying their current incentives.”
“The Senate version has made these adjustments, while remaining consistent with the key principles of this tax reform,” he added. (PNA)
