DOF assures Japanese of good PHL tax climate.
This is what Finance Secretary Carlos G. Dominguez III told a delegation from Kansai Economic Federation (Kankeiren) based in Osaka, Japan.
'We would like to point out that, actually, our economy is growing very quickly. If you want to participate in the local economy, you have to better invest here,' said Dominguez during his recent meeting with Kankeiren members led by its chairman, Masayoshi Matsumoto. 'We'd like to make you feel welcome, but what will make you feel welcome is the improving disposable income of our people, improving infrastructure, improving peace and order, and I'm sure many Japanese companies can certainly benefit here.'
Package 2 of the CTRP, which aims to cut the corporate income tax (CIT) rate from 30 percent to 25 percent and eventually to 20 percent, as well as rationalizing fiscal incentives, is expected to help attract more investors for the country.
The reduction of the CIT under Package 2, also called the Tax Reform for Attracting Better and Higher- Quality Opportunities (Trabaho) bill, will make the country's CIT on a par with the other Association of Southeast Asian Nations (Asean) economies.
However, the Trabaho bill is still being deliberated in Congress. Dominguez, nonetheless, remains hopeful that the bill, alongside the remaining three packages under the CTRP, would be approved later this year.
Dominguez also noted that the fiscal incentives under the tax reform program would not be removed but would instead be rationalized or improved to ensure that these are performance-based, targeted, time-bound and transparent.
'Rather than look at the effect of tax reform on some companies, look at the effects of tax reform on the entire economy, because it is making it better. Instead of looking at the place where you might lose, look at opportunities in the larger economy,' he added.
Matsumoto, who is also the chairman and CEO of Sumitomo Electronic Industries, said he is 'very satisfied with the explanation' of the finance chief about the need to rationalize fiscal incentives in the country.
Dominguez explained that the country's current system of fiscal incentives despite being 'the longest and most generous' among the Asean economies have not attracted more investors to the Philippines, which remains among the lowest recipients of foreign direct investments in the region.
'There is no danger that we are abandoning fiscal incentives. But as I described to you, it is really necessary for us to rationalize it. I hope for your understanding and support because we certainly don't want to hurt companies that are making a good contribution to Philippine society,' Dominguez said.
He also assured Kankeiren that the 'one-stop shop' that Japanese investors are currently enjoying through the Philippine Economic Zone Authority (Peza) would not only be retained but would also be the norm for all business applications in the future, following President Duterte's signing into law of the Ease of Doing Business Act last year.
'Everything that makes business easier, we will keep and we will improve,' Dominguez added.
Present during the meeting were, among others, Japanese Ambassador to the Philippines Koji Haneda and Masayuki Matsushita, Kankeiren vice chairman and chairman of its International Committee, and vice chairman of Panasonic Corp.
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|Publication:||Business Mirror (Makati City, Philippines)|
|Date:||Apr 24, 2019|
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