Japan urges PH to go slow on plan to remove incentives
Japanese Ambassador Koji Haneda has urged the Philippine government to listen to the concerns of Japanese companies doing business locally, about the looming removal of certain fiscal incentives that will come as a result of a key tax reform measure.
In his speech at the 44th Philippine Business Conference and Expo here Friday, Haneda emphasized that Japan has been one of the Philippines’ top sources of foreign investments and has helped the government create jobs.
He said Japanese firms invested about P700 billion between 2000 and 2017. Japan’s foreign direct investments (FDIs) reached P32 billion in 2017, covering 32 percent of the total FDI last year, the envoy said. He further noted that more than 1,500 Japanese firms operating in the country generate more than 250,000 jobs.
With the significant contribution of Japanese investors here, Haneda requested the Philippine government to consider the comments of Japanese businessmen regarding the Tax Reform for Attracting Better and High-Quality Opportunities or the TRAIN 2 bill. “According to a survey, one of the advantages in investing in the Philippines is the fiscal incentives,” Haneda said.
More than 900 companies are registered with the Philippine Economic Zone Authority (PEZA).
As PEZA-registered firms, these companies are enjoying the faster service in PEZA, as well as a 5-percent gross income earned (GIE) incentive in lieu of local and national taxes. “We hope that their inputs will be accordingly considered in the discussion of the TRAIN bill,” he added.
The Japanese Chamber of Commerce and Industry of the Philippines, Inc. wants to retain the current fiscal incentives regime in PEZA. The second package of tax reform program of the administration aims to rationalize fiscal incentives.
Under the TRAIN 2 bill, companies that are enjoying the 5-percent GIE incentive will soon lose this perk. (PNA)