CITIRA unlikely to be passed in March
THE MEASURE lowering the corporate income tax and streamlining fiscal incentives is not likely to hurdle the Senate before the March 13 adjournment, according to the Senate president, even as the Executive branch pressed the chamber for prompt action on the key tax reform.
“Malabo ’yung CITIRA (Corporate Income Tax and Incentives Rationalization Act) at PIFITA (Passive Income and
Financial Intermediary Taxation Act),” Senate President Vicente C. Sotto III said in a radio interview aired on Thursday.
Mr. Sotto said Senator Juliana Pilar S. Cayetano, chair of the Ways and Means committee, discussed the tax reform measures during a Senate caucus.
“Sinasabi niya sa amin ’yung mga intricacies, medyo maraming questions (She told us the intricacies, there are many questions),” he said.
Mr. Sotto said the Senate leadership is scheduled to meet with the Executive department on Monday evening (Feb. 17), and later with Finance Secretary Carlos G. Dominguez III on Wednesday (Feb. 19).
“Siguro matatalakay din namin ‘yan (Maybe we can also tackle this),” he added.
The Department of Finance (DoF) recently came out with a newspaper advertisement that
quoted President Rodrigo R. Duterte’s fourth State of the Nation Address (SoNA) on July 22, 2019, in an apparent public plea to the Senate.
“I implore Congress to immediately pass Package 2 of the Comprehensive Tax Reform Program, which will gradually lower corporate income taxes, and improve fiscal incentives,” the ad, which was published in the Feb. 11 issue of The Philippine Star, read in part.
Sought for comment, Finance Assistant Secretary Antonio Joselito G. Lambino II explained the newspaper ad forms part of its information drive.
“We are doing all we can to support our legislative champions. This includes various forms of engagement — media interviews, explainers, briefers, speaking at public events, face-to-face meetings. We also provide legislators and their staff data and analysis on our tax reform packages upon request,” Mr. Lambino said in a phone message, Wednesday.
The Senate version of the measure is still being finalized by the committee; while its counterpart, House Bill No. 4157 was approved on Sept. 13, 2019. Ms. Cayetano on Wednesday said she is close to sponsoring the measure in the plenary, but no timeline was given.
Finance Secretary Carlos G. Dominguez III earlier said he expects the CITIRA to be passed into law by March.
The government is hoping the CITIRA will spur more foreign investments in the country, as it proposes to cut corporate income tax to 20% from the current 30%.
However, the uncertainty over the bill’s provisions on tax incentives has been identified as one of the reasons for slowing foreign investments.
Foreign direct investments fell by 29.9% to $6.413 billion in the January to November period last year. Data provided by Philippine Economic Zone Authority showed that approved investments in 2019 dropped 16.19% to P117.54 billion, from P140.24 billion in 2018.
The Senate panel is also currently deliberating on the proposed PIFITA, in an attempt to meet the Finance Department’s year-end target for its passage.