MANILA, Philippines - President Aquino may not like it, but US President Barack Obama thinks governments should offer more tax incentives, particularly to small businesses.
“I do think there’s a role for the government to provide tax incentives,” Obama said in a session at the APEC CEO Summit yesterday in Makati City.
The world’s most powerful leader made the comment during a question-and-answer session that followed his keynote speech. His guests were Alibaba founder Jack Ma and Aisa Mijeno, initiator of the Sustainable Alternative Lighting (SALt) project.
The forum was held in conjunction with Manila’s hosting of this year’s Asia-Pacific Economic Cooperation (APEC) meetings. The Economic Leaders’ Summit, chaired by Aquino, will culminate today.
Obama shared his insights after Ma suggested the possibility of tax exemption to support small businesses and entrepreneurs by freeing up more of their resources to channel to investments.
Mijeno, whose project of generating light through saltwater has reached far-flung areas, said enterpreneurs like her need “support systems” from the government and the private sector.
“Especially now, we are trying to mass produce the lamps so we are just looking for someone to get the project going,” she said, to which Ma jokingly volunteered.
Ma, for his part, said: “Government would do good to reduce tax or to have no tax on these guys.’’
Aquino has come under fire from various groups for his cool reception to proposals in Congress to slash income tax rates. The Department of Finance, in particular, said the measure, if enacted, would cost the government P30 billion every year.
In addition, the DoF has also been pushing for the rationalization of fiscal incentives given to investors. A bill has stalled in Congress at the committee level after the DoF and the Department of Trade and Industry (DTI) came at loggerheads on the proposal.
On one hand, the DoF said restructuring tax incentives would boost state revenues, while the DTI has said doing so may discourage investments to the country.
In an interview last week, Finance Secretary Cesar Purisima told The STAR his agency and the DTI have already agreed on “97 percent” of the issues surrounding the bill.
“The remaining three percent will be tackled in Congress,” he stressed.
Asked if there is still time to pass the measure considered a priority of the Aquino administration, Purisima only said: “Obviously there are tough issues that need to be resolved, but we are in constant discussions with the DTI.”