House panel OKs bill lowering corporate income tax » Manila Bulletin News

Manila Bulletin Philippines

Breaking News from the Nation's leading newspaper

Tempo

Online Newspaper

Showbiz and Celebrity News

Sports News

World News
News Asia

House panel OKs bill lowering corporate income tax

Published

By Charissa Luci-Atienza 

The House Committee on Ways and Means overwhelmingly approved on Wednesday a bill seeking to reduce the corporate income tax rate from 30 percent to 20 percent and rationalize the grant of fiscal incentives to investors and locators.

House of the Representatives (ALVIN KASIBAN/ MANILA BULLETIN/ FILE PHOTO)

House of the Representatives (ALVIN KASIBAN/ MANILA BULLETIN/ FILE PHOTO)

Voting 27 for and 2 against, the House panel, chaired by Albay Rep. Joey Salceda, passed House Bill 313, the Corporate Income Tax and Incentive Rationalization Act (CITIRA) Bill. The measure is the second package of the Duterte administration’s Comprehensive Tax Reform Program (CTRP).

“This is a national imperative. We need to lower taxes to remain competitive,” Salceda, principal author of the bill said, before his panel approved the measure and endorsed it for plenary discussion.

HB 313 is the version of the measure approved on third and final reading during the previous 17th Congress. It is formerly known as the Tax Reform for Attracting Better and High-quality Opportunities (TRABAHO) bill.

It was Nueva Ecija Rep. Estrellita Suansing, vice chairman of the House Committee on Ways and Means and one of the authors of the bill, who moved for the approval of the bill for plenary consideration.

The former chairperson of the House Committee on Ways and Means during the previous 17th Congress again invoked Rule 10 Section 48 of the House of Representatives, which provides that the measures that have been approved on third and final reading by the Lower Chamber in the previous Congress may be referred to the plenary upon the approval of the majority of the panel members.

“In case of bills or resolutions that are identified as priority measures of the House, which were previously filed in the immediately preceding Congress and have already been approved on third reading, the same may be disposed of as matters already reported upon the approval of majority of the Members of the committee present, there being a quorum,” according to the House Rule.

The CITIRA bill was approved, a day after the Salceda panel passed House Bill 1026, which seeks to raise the excise tax on alcohol products. The proposed imposition of higher excise tax rates on alcohol products is the Package 2 Plus B of the Duterte administration’s Comprehensive Tax Reform Program (CTRP).

Bayan Muna partylist Rep. Carlos Isagani Zarate and Gabriela partylist Rep. Arlene Brosas strongly opposed the passage of the CITIRA bill.

HB 313 seeks to reduce the current 30 percent corporate income tax by two per two years. It pursues to exempt the Home Development Mutual Fund from income taxation, given that the Social Security System (SSS), Philippine Health Insurance Corporation (PHIC), and Government Service Insurance System (GSIS) are already exempted.

The measure also seeks to remove the option for corporations, including resident foreign corporations, to avail of the 15 percent gross income tax and subject corporate taxpayers who enjoy preferential rates, to the 30 percent CIT or the adjusted CIT.

The bill grants the President the power to grant incentives if the project has a comprehensive sustainable development plan and will bring in at least US$ 200 million.

It will grant income incentives for a maximum of five years, removing perpetual five-percent on gross income earned (GIE) and limiting income tax holiday (ITH).

The measure provides that in lieu of ITH or reduced CIT, incentives may be extended on a per industry basis, upon BOI approval. It also reduces the 18 percent CIT by one percentage point every other year, and adds two years to incentives (Inclusive of one-year ITHP) for the following projects: those located in lagging areas, in areas recovering from armed conflict or major disasters, in agri-busines outside major urban areas, and those relocated from Metro Manila and nearby urban areas.

“This bill will strive to encourage investors and locators to reapply after the five-year or seven-year period, to qualify for another five years of incentives, and the measure also specifies that VAT treatment shall be based on location and export sales,” Salceda said.

He said the plenary deliberation on the CITIRA bill is expected next week.

Related Posts