By Argyll Cyrus Geducos
House committee on ways and means chair Representative Joey Salceda expressed confidence that Philippine Economic Zone Authority (PEZA) locators will not move out of the country once they read the Corporate Income Tax and Incentives Rationalization Act (CITIRA) bill.
Salceda made the statement after Director General Charito Plaza said the agency will go all or nothing in seeking for the exemption of locators from the coverage of the CITIRA bill, reiterating that it should be applied to domestic enterprises only and that economic zone firms should be allowed to enjoy their tax perks after the measure’s passage.
In a press briefing in Malacañang, Salceda said locators will not leave the country once they read the law.
“Once they read the law, they will stay. They will stay. Under the law—theirs’ is only ideological resistance to change, but it’s always change for the better,” he said.
According to Salceda, new Philippine investors are attracted by the “willfulness” of the top management of the Philippines.
“They see that the President really will finish the infrastructure; that there are improvements in the ease of doing business; in the predictability of policy. The best thing to do with CITIRA is approve it,” he said.
Meanwhile, the lawmaker also addressed the concern of the IT-BPM industry that they will find it harder to globally compete should CITIRA Bill be passed.
“I think they have to run the numbers. I want to see their numbers. Let’s run the numbers together,” Salceda said.
“They are better off. I told them, ipapaputol ko ang daliri ko kung may isang piso na malugi sa inyo (that I would have my finger cut off if they lose a single peso because of it),” he added.
No job losses
In the same press briefing, Finance Undersecretary Karl Chua said that the CITIRA bill would generate jobs instead of the other way around.
He explained that the CITIRA bill would decrease corporate income tax from 30 to 20 percent and this is seen to create an estimated 1.5 million jobs.
He added that Filipino investments that went abroad because of the lower tax rate will be enticed to come back.
“So what we strongly believe is that there is no threat of job destruction or loss. Iyong mga nagsasabi po na aalis po sila (Those who threatened to leave), I challenge them – show me the names and the numbers. Until today po, wala pong nabibigay (Until today, they’ve presented nothing),” Chua said.
The CITIRA bill aims to gradually cut corporate income taxes starting in 2021, eventually bringing down the current 30 percent to 20 percent by 2029.
It also seeks to rationalize fiscal incentives or remove certain perks. The measure retains the current incentives for two years, for investors to have enough time to adjust to the new tax scheme. Perks would also be targeted, time-bound, and transparent.