By Bernie Cahiles-Magkilat
The Philippine Business Conference (PBC), the country’s biggest annual business gathering, has thrown its support behind the government’s second tax reform package but would like a faster reduction of corporate income tax (CIT) with incentives package fine tuned for longer transition period of 10 years to support export industries, increase foreign direct investments and prevent job losses.
The issue of taxation was highlighted in the 32-Point Resolutions of the 45th PBC to be submitted today (Oct. 17) for President Rodrigo Duterte’s consideration. As a tradition, the president will deliver a keynote speech to cap the annual business conference. The two-day 45th PBC and Exposition with the theme “Enabling Business in a Digital Economy,” opened yesterday at the Manila Hotel with Vice-President Lenny Robredo as opening keynote speaker before more than 900 participants from various chambers of the Philippine Chamber of Commerce and Industry across the country.
In the 45th PBC, businessmen passed a resolution supporting the Corporate Income Tax and Incentives Rationalization Act (CITIRA) bill but urged the Department of Finance (DOF) to “expedite” the reduction of the CIT.
Businessmen said they would like a CITIRA Bill that adopts the “lowering of corporate income tax rate of 20 percent with no condition to make the country at par with the ASEAN neighbors and provide longer transition period of 10 year for existing registered enterprises availing the fiscal incentives, and rationalization of fiscal incentives under the Strategic Investment Priority Plan (SIPP) and for the Investment Promotion Agencies (IPAs) to continue as one-stop-shop in the availment of these incentives.”
The 45th PBC stressed that “incentives package must be fine tuned to support the export industries, increase foreign direct investments (FDIs) and prevent job losses.”
This particular PBC Resolution on CITIRA Bill mirrors the position of the Philippine Economic Zone Authority (PEZA), which registered enterprises are the most affected in the planned overhaul of the country’s incentive system to investors as they would be losing the attractive 5 percent tax on gross income earned which that they enjoy perpetually.
Meantime, other PBC Resolutions were on infrastructure, power, agriculture, logistics, and ease of doing business.
On infrastructure, the 45th PBC urged concerned government agencies to fast track construction and timely completion of projects to provide efficient transport facilities, improve connectivity, lower transportation and logistics costs, and reduce road congestion.
On transportation and logistics, the 45th PBC also urged government to issue a Joint Administrative Order establishing guidelines in the application of local charges imposed by international shipping lines, freight forwarders or logistics companies, customs brokers, cargo truck operators, terminal and port operators, and container yard operators to comply with existing laws and instructing the Bureau of Customs and Philippine Ports Authority to improve productivity in the handling of cargoes as agreed by the stakeholders.
In line with this issue is to support the passage of House Bill 4316 or the act regulating the application of local charges (at origin and destination) imposed by international shipping lines, the PBC Resolution added.
They also called for a transfer of the functions of the Chain and Logistics Management Division under the Department of Trade and Industry to Maritime Industry Authority under the Department of Transportation in order to regulate international shipping lines.
Congress was also urged to pass HB 4319 – an act separating the regulatory and commercial functions of the Philippine Ports Authority (PPA) by converting it to Philippine Ports Corporation (PHILPORTS) for the development, management and operation of public ports within its system and transferring the regulatory functions to the Maritime Industry Authority.
The DOTR was also urged to facilitate rehabilitation and extension of the Philippine National Railway (PNR), and construction of high-speed commuter and cargo train services from Manila to other parts of Luzon and construction and upgrading of provincial airports.
Congress was also asked to pass HB 4317 – an act amending the provisions of Public Service Act (PSA) to induce investment and competition by liberalizing the sectors that are considered as public utilities.
Businessmen also asked Malacanang to appoint a Water Czar who will shepherd various reform efforts in the management of water resources and the governance and economic regulation of the water sector.