MANILA -- The British Chamber of Commerce Philippines (BCCP) threw its support to the government’s tax reform program, noting that this will raise the country’s competitiveness in the region.
In a media briefing Wednesday, BCCP Chairman Chris Nelson said British firms doing business in the country welcome the lowering of corporate income tax (CIT) rates, as proposed under the second package of the Tax Reform for Acceleration and Inclusion (TRAIN). “The proposed reduction in corporate income tax is a welcome initiative. What the finance department and the government (are) trying to achieve is to make the Philippines more competitive in ASEAN,” he said.
“I think with the reduction, which was proposed from 30 (percent) to 25 (percent), I think, will still not make you the lowest (in ASEAN). But obviously, it is a move in a right direction,” he added. The Philippines’ current tax rate is the highest in ASEAN, compared to Indonesia’s 25 percent CIT rate; Malaysia and Laos at 24 percent; Thailand, Vietnam, and Cambodia at 20 percent; and Singapore at 17 percent.
“TRAIN 2 is still being discussed, and there will be some amendments. I believe, if you do a tax move, it should be a one move,” Nelson said, noting that the cut in CIT rate should not be in staggered implementation.
House of Representatives Bill No. 7458 or the TRAIN Package 2 noted that “corporate income tax shall be reduced by one percentage point every year beginning Jan. 1, 2019.”
On TRAIN Package 2’s streamlining of fiscal incentives, Nelson said the government has to do a balancing act in modernizing the tax incentives program and making these tax perks still attractive to investors. “They have to look at these incentives in comparison to others. Because what we want to do is to get more companies and to keep those companies, which are already here, expanding,” said Nelson.
Under the TRAIN Package 2, the Department of Finance eyes a single fiscal incentives program to be implemented in 14 investment promotion agencies (IPAs) in the country.
Most of the companies that will be affected by the streamlining of incentives are those within the economic zones, most of which are registered with the Philippine Economic Zone Authority (PEZA).
The BCCP executive, however, mentioned that the modernization of the fiscal incentives under the TRAIN Package 2 will not have a huge impact on its members, as only a few of its members are located in economic zones. (PNA)
