MANILA – President Rodrigo Duterte has certified as urgent Senate Bill (SB) 1357 or the proposed Corporate Income Tax and Incentives Reform Act (CITIRA), which aims to lower corporate income tax and update fiscal incentives.
Duterte, in a letter dated March 9 and addressed to Senate President Vicente Sotto III, stressed the need for the “immediate enactment” of the bill to further boost the country’s economy.
“I hereby certify to the necessity of the immediate enactment of Senate Bill No. 1357… to further institute tax reforms by rationalizing the corporate income tax and incentives system in order to promote foreign direct investment inflows and the expansion of business ventures conducive to economic growth and job generation,” Duterte explained.
Malacañang released a copy of the letter on Tuesday.
Doing away with the mandated three-day interval, Congress can pass on second, third and final reading on the same day the proposed measure certified as urgent by Duterte.
The proposed CITIRA forms part of the current administration’s comprehensive tax reform program.
SB 1357 seeks to gradually reduce corporate income tax to 20 percent by 2030 from the current 30 percent.
The bill also prioritizes incentives of business activities that generate local employment, promote development, innovation, high technology projects, and agribusiness, and invest in areas that are less developed areas or communities recovering from disasters and conflicts.
It also offers tax deductions to reward corporations’ good behavior, such as local job creation, exports, and investment in high technology.
The Philippines currently imposes the highest corporate income tax rate in the Association of Southeast Asian Nations (Asean), hampering its ability to compete with other countries with a lower corporate income tax.
Trade Secretary Ramon Lopez earlier said the CITIRA bill would help remove the “uncertainties and the “wait-and-see attitude” of foreign investors.
Lopez said the proposed measure would also make the Philippines competitive in the regional bloc where corporate tax rates range between 17 percent and 25 percent.
Philippine Chamber of Commerce and Industry President Benedict Yujuico on Monday said the proposed measure will boost the competitiveness of micro, small, and medium enterprises (MSMEs), which comprise 99 percent of business in the country.
MSMEs also generate about 63 percent (5.7 million) of the country’s total employment and account for 25 percent of the total export revenue. (PNA)