ECCP calls for quicker CIT reduction

Credit to Author: TYRONE JASPER C. PIAD| Date: Wed, 23 Jan 2019 16:16:34 +0000

Accelerating corporate income tax (CIT) reductions could make the investment prospects in the Philippines more attractive, the European Chamber Commerce of the Philippines (ECCP) said.

In a media briefing on Wednesday, ECCP President Nabil Francis said the Philippines’ CIT was one of the highest in the region and had to be lowered to maintain competitiveness.

Francis commended the effort of the government, through the Tax Reform for Attracting Better and High-Quality Opportunities (Trabaho) bill, to lessen CIT but said a “bolder” move should be taken.

The Trabaho bill aims to reduce CIT from 30 percent to 20 percent in 10 years, which he finds too long. “The sooner the better. We try to squeeze it as quickly as possible,” he said.

ECCP Executive Director Florian Gottien said, “We have to give away incentives in order to attract companies to invest in the Philippines.” “Some of our Asean neighbors
are moving forward, faster than we do. I think that’s the main issue,” he added.

Looking at the local macroeconomy, Francis said the ECCP had a “cautious optimism” for this year amid the global headwinds that could impact the country.

He enumerated the political impact of US President Donald Trump on the markets, the on-going US-China trade war, Brexit and the recent economic slowdown of China which recorded its lowest gross domestic products (GDP) figure in 28 years. “We need to be vigilant because these may have some impact,” Francis said.

He said the economic conditions in the country were also becoming favorable with above 6-percent GDP growth being sustained and inflation easing from its nine-year high. “The fundamentals in the country are good. The country debt is below 40 percent. The budget deficit less than 3 percent,” he added.

Although no figures were released yet for the 2018 foreign direct investments (FDI), Francis said it was estimated to be around $10 billion or more. This is figure is at par with the 2017 FDI but above the $7.93 billion and $5.64 billion recorded in 2016 and 2015 respectively.

Earlier, the Joint Foreign Chambers of the Philippines said this year’s FDI was expected to exceed $10 billion as the country anticipates high prospects with “continued political and economic stability.” “We believe that we can do better. We believe the Philippines can do better,” Francis said.

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