Albay Rep. Joey Salceda
MANILA – The House of Representatives is willing to accept a fiscally reasonable Senate version of the proposed Corporate Income Tax and Incentives Reform Act (CITIRA) bill to ensure its speedy passage, a House leader said on Wednesday.
In an aide-memoire addressed to Speaker Alan Peter Cayetano, House ways and means committee chair Joey Salceda would continue working with the Senate to expedite the enactment of the CITIRA and end the uncertainty in the discussions.
“The interest of the House was speed, and many analysts claim that speed is now the paramount consideration in CITIRA, validating our approach of well-studied, well-deliberated speed,” Salceda said as the plenary deliberations on the tax measure started at the Senate.
“In the interest of a speedy passage of CITIRA, the House may accept a Senate version of CITIRA that is fiscally acceptable, to avoid the uncertainty and policy distortions that a bicameral conference can sometimes cause, and to end the long and repetitive discussions once and for all,” he added.
Salceda, however, noted that his panel would object to a version that retains the grant of tax incentives “in perpetuity.”
“When an activity can be granted a tax incentive forever, the firm no longer has any incentive to improve performance or innovate, making the tax discount a non-incentive (in effect, a giveaway),” said Salceda.
Salceda said the House panel would also object a provision allowing abusive transfer pricing, which makes it easier for firms to avoid paying their fair share of taxes by unduly shifting costs from one activity to another.
While the House panel recognizes that exact revenue neutrality may be difficult if not impossible to achieve, Salceda said the House shall object a version of CITIRA that unduly compromises fiscal stability and risks the country’s credit rating.
He said the chamber would stand firm on the expansion of the Fiscal Incentives Review Board (FIRB).
“No FIRB makes the reform meaningless. The power of the State to allocate public resources according to its priorities is the very heart of the reform,” he said.
Salceda said both the Senate Bill 1357 and the House Bill 4157 aim to make the corporate income tax and incentives system simpler, fairer, and more efficient.
The lawmaker highlighted that both bills aim to make incentives performance-based, targeted, time-bound, and transparent.
“More importantly, both versions will, once and for all, put an end to “forever” in our incentives system. Incentives will no longer be granted in perpetuity. Both versions dispersing development in the countryside through a tiered system of granting more incentives the farther one locates from Metro Manila and highly-urbanized areas,” he said.
“Both versions encourage the use of domestic inputs, job creation, training, and research and development through a simple system of enhanced deductions,” he added. (iam/sovereignph.com/PNA)