MANILA, Philippines -The European Chamber of Commerce of the Philippines (ECCP) supports the government’s plan to offer a lower corporate income tax rate for 15 years under the proposal to rationalize fiscal incentives as an additional incentives, citing that a wider set of incentives to choose from would allow the country to attract investments.
“We support it as a new addition incentive option to attract investors. Emphasis is on additional, meaning the fiscal incentives’ menu is widened,” ECCP vice president for external affairs Henry Schumacher said in a text message.
The government is looking at imposing a 15 percent corporate income tax rate for 15 years, renewable for another 15 years under the proposal to rationalize fiscal incentives.
In a meeting report posted on the ECCP’s website, the group said it met with Trade Secretary Gregory Domingo to discuss the proposal as well as other pending economic measures last week.
According to the group, Domingo said during the meeting that investors should run the numbers to see the benefit of the proposed lower tax rate versus short-term income tax holidays.
The ECCP said incentives are needed to compensate for the higher cost of doing business in the Philippines.
At present, firms which register with the Board of Investments (BOI) and Philippine Economic Zone Authority (PEZA) enjoy exemption from payment of corporate income tax for a period of six years for pioneer projects and four years for non-pioneer projects.
The government is moving to simplify the incentive regime to make the country a more attractive location for investors as well as to cut the foregone revenues.
Aside from the proposal to rationalize fiscal incentives, the mining fiscal regime bill, creation of a Department of Information and Communications Technology (DICT) as well as Foreign Investment Negative List (FINL) were also discussed.
On the mining fiscal regime bill, the ECCP said the Philippines runs the risk of not becoming a competitive mining investment destination.