PEZA makes a sharp U-turn, gives in to DOF’s Citira bill
In a surprise turn of events, Philippine Economic Zone Authority (PEZA) director General Charito Plaza has decided to support the Comprehensive Income Tax and Incentive Rationalization Act (Citira), which seeks to lower corporate income tax rates and rationalize tax incentives.
In a statement, Trade Secretary Ramon Lopez announced that Plaza had “officially aligned” with the rest of the Duterte Cabinet on the proposed CITIRA bill.
“We had to explain fully that there are ongoing refinements in certain provisions of the bill to address the serious concerns of the stakeholders, especially the existing PEZA locators, and a number of senators who are equally concerned on minimizing any possible repercussion on jobs if some firms leave the country,” Lopez said.
“To have a smoother transition, current discussions are on the number of years in the sunset provision for existing locators, as well as extra years of income tax holiday (ITH) and lower tax rates for new projects in strategic, high-technology industries with preference on locating in least developed areas. It was emphasized that the concerns of the stakeholders are being addressed,” he added.
The DOF has been pushing for the reduction of the income tax rate on corporations to 20 percent from the current 30 percent and the rationalization of fiscal incentives being enjoyed by investors to further boost government coffers.
Plaza was earlier against the bill, saying the proposed changes would make the country less attractive and result in the displacement of thousands of Filipino workers.