Joint Statement of Support for CITIRA

October 12, 2019

We support the overall corporate income tax framework proposed under the Corporate Income Tax and Incentives Rationalization Act (CITIRA) Bill lowering the corporate income tax (CIT) and at the same time widening the tax base and promoting discipline in tax expenditure through a more prudent, targeted and transparent fiscal incentives system.

The lowering of the CIT rate from 30% to 20%, although over a long period of 10 years, will eventually put us within the ASEAN range. This will not only make us more competitive in attracting foreign investments, but it will also make our domestic corporates at par with their counterparts, thus making them more competitive as they expand their operations outbound under an integrated ASEAN market.

We are aware that the tightening of tax incentives is not welcomed by certain sectors within our ranks, but we believe in the underlying principles of having a tax incentives system that is transparent, performance-based, targeted and time-bound. We believe in the equitable sharing of tax burden, as we believe in the equitable enjoyment of living in an orderly, healthy, and prosperous society.

We support the enhancement and modernization of tax reporting system through the use of electronic sales reporting system, thereby reducing compliance costs.

We, however, propose refinements on the following:

1. The scheduled CIT rate reduction should be fixed and not conditional, although an acceleration of rate reduction, should fiscal circumstances warrant, is welcomed to be competitive with ASEAN peers. Uncertainty is the biggest nightmare in doing business.
2. Provide a reasonable fixed transition period for concerned firms under the gross income earned (GIE) regime to adjust their operations and prevent dislocation.
3. We are supportive of a one-stop shop approach for registered enterprises that would allow them to deal with only one tax agency, in effect avoiding the rigors of going through difficult processes and different rules of local government units.

BANKERS ASSOCIATION OF THE PHILIPPINES (BAP)
CEBU BUSINESS CLUB (CBC)
FEDERATION OF FILIPINO CHINESE CHAMBERS OF COMMERCE & INDUSTRY, INC. (FFCCCII)
FINANCIAL EXECUTIVES INSTITUTE OF THE PHILIPPINES (FINEX)
FOUNDATION FOR ECONOMIC FREEDOM (FEF)
MANAGEMENT ASSOCIATION OF THE PHILIPPINES (MAP)
ORGANIZATION OF SOCIALIZED HOUSING DEVELOPERS OF THE PHILIPPINES (OSHDP)
SUBDIVISION AND HOUSING DEVELOPERS ASSOCIATION (SHDA)
TAX MANAGEMENT OF THE PHILIPPINES (TMAP)
UP SCHOOL OF ECONOMICS ALUMNI ASSOCIATION (UPSEAA)
WOMEN’S BUSINESS COUNCIL PHILIPPINES (WBCP)