By Anna Leah E. Gonzales
THE Semiconductor and Electronics Industries in the Philippines Foundation Inc. (Seipi) on Tuesday backed the Philippine Economic Zone Authority’s (PEZA) proposal to create a separate set of incentives for export and domestic firms in the proposed second package of tax reforms.
“Seipi supports PEZA’s position to retain the current incentives and separate the incentives for domestic versus export industries like electronics,” said Seipi President Dan Lachica in a statement.
PEZA Director General Charito Plaza earlier urged senators to consider two separate regimes of tax incentives for export and for domestic market enterprises.
The Corporate Recovery and Tax Incentives for Enterprises (Create) Act, the second package of the government’s tax reform, proposes to reduce the corporate income tax from the current 30 percent to 25 percent this year, and further trim it by 1 percentage point starting in 2023 to reach 20 percent in 2027.
The proposed bill, however, also seeks to rationalize incentives currently being enjoyed by select firms especially those in economic zones.
“First of all, please let me make it clear that Seipi supports Create’s proposed immediate reduction of corporate income tax. However, we are concerned about Create’s proposed incentives rationalization,” said Lachica.
Lachica said they are supporting Senate President Pro Tempore Ralph Recto’s proposal to include a grandfathering rule in the proposed bill.
The grandfathering provision would allow businesses to continue operations and enjoy the perks received under old laws, and be exempt from new ones that would be applied to new investors or enterprises.
The industry group earlier warned that from the year the second package of tax reform takes effect, the industry will suffer an estimated 38,000 direct and 266,000 indirect job losses.
Lachica also disclosed that two electronic companies have stopped their operations in the country due to the “uncompetitive business environment.”
Source: The Manila Times
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