Speaker Alan Peter Cayetano on Thursday cited the importance of the country being competitive with its Southeast Asian neighbors in terms of tax and other fiscal incentives.
The Speaker met on Wednesday with Finance Secretary Carlos Dominguez to discuss taxes in general and business incentives in particular.
He said taxes are the lifeblood of the government, which it uses to fund the delivery of basic services.
“The key is to make taxation equitable, progressive. This means that the poor should pay less, while the rich and businesses should pay more. But that is not that simple, because it is important that the country remains competitive. Even our own regions have to compete with each other,” he said.
Cayetano recalled that in the 80s-90s, there were hundreds of manufacturing corporations located in his home city of Taguig.
“Later, they transferred to Cavite, and eventually from Cavite to China. So the reality is we have to look at the incentives offered by Vietnam, Thailand and the rest of Southeast Asia. We have to look at how attractive our own incentives are for business to come into the country,” he said.
In the latter part of last year, the House of Representatives had passed a bill containing its version of “time-bound and performance-based” tax incentives. The measure has since been pending with the Senate.
The proposed law also seeks to reduce corporate income tax from 30 percent to 20 percent over 10 years. The measure Dominguez supports the House version, but Trade Secretary Ramon Lopez and the Philippine Economic Zone Authority have asked the Senate to introduce changes.
“So we are looking at corporate income tax and incentives after the enactment of the sin tax law,” Cayetano said.
He called on the Senate to act on the bill, saying Congress has “limited time” and will adjourn for its Holy Week recess middle of next month.
The Speaker also urged citizens to communicate to their representatives any proposal they have on taxation. “If you think there is a provision in the Tax Code that is unfair, or a problem with tax administration – meaning the law is okay but implementation or revenue collection is not right – let us know, so we can take action,” he said.
