In a press conference, PCCI president Ambassador Donald Dee also reiterated the chamber’s support for the value-added tax (VAT), while opposing the three percent increase in the corporate income tax (CIT).
According to Dee, the restoration of the OPSF would not result in lower oil prices and may initially result in a spike in oil prices.
However, the objective of the restoration of the OPSF, Dee explained, would be to restore stability in local oil prices.
But hand in hand with the restoration of the OPSF, Dee said, the Oil Deregulation Law should also be repealed.
In restoring the OPSF, though, Dee said, a safeguard should be installed wherein a cap should be placed on the amount to be reimbursed to the oil companies once world crude prices rise.
This would mean, Dee said, that if the disparity between the contribution and the drawdown is wide, the amount to be reimbursed would not cover the entire amount to ensure that the OPSF is not depleted.
The OPSF was established during the world oil crisis in the late 1970s to early 1980s as a buffer fund to shield local oil prices from fluctuations.
Local oil companies contributed to the OPSF when world crude prices were low, and made drawdowns from the fund when crude prices rose, thus ensuring that local oil prices remained relatively constant.
However, the government had to partially subsidize the OPSF, resulting in a budgetary deficit.
Acknowledging the continuing budget deficit problem of the government, Dee pointed out that the business sector, which normally avoids accepting any increase in taxes, fully supports the two percent increase in the VAT which could raise as much as P60 billion for the government especially if all exemptions are removed.
On the other hand, though, Dee warned, increasing the current corporate income tax (CIT) from 32 percent to 35 percent would scare away local and foreign investors especially since almost all of the Philippines’ ASEAN neighbors have lowered their CIT.
The prevailing CIT in ASEAN ranges from the 17.5 percent of Hong Kong to the 30 percent of China and Thailand.
The PCCI also opposes, Dee said, a proposed bill on full transparency on tax collection that would allow the publication of taxpayer information on his tax payments as well as sensitive information on their address and business processes.
The PCCI, Dee argued, believes that such information has no relevance to increasing the government’s overall revenue collection.
In fact, Dee warned, the publication of such information may even be misused by unscrupulous and criminal elements.