Lufthansa to leave PH if Citira is passed

AIRCRAFT maintenance, repair and overhaul ( MRO) company Lufthansa Technik Philippines seeks for the retention of duty exemptions and warns of closing operations in the Philippines if the government’s second package of tax reform will pass in its current form.

“In its current form, the MRO industry is not properly represented in the bill. The new Citira (Corporate Income Tax and Incentive Reform Act) has no representation for MRO companies, so we consider that as a technicality; [and] if you don’t solve that, then we cannot survive,” Lufthansa Technik Philippines President and Chief Executive Officer Elmar Lutter said on the sidelines of the “Investments Insights” roundtable held at the Bonifacio Global City last week.

Lutter said MRO companies should still be exempted for duties for raw materials and spare parts under the Citira bill, further noting these incentives were currently being given by the Philippine Economic Zone Authority (PEZA).

“For the MRO companies two things are very vital. Everybody is affected. I mean much higher taxes would reduce our ability to invest here, but special things are the taxes on spare parts both on customs duties and VAT (value added tax). These are very special provisions which have to be inserted for the MRO industries, otherwise this whole industry cannot not survive; [and] we cannot only attract work from outside the country, we will also lose the work which comes here