41st PBC...

and Industry. At the end of each PBC, businessmen will pass a set of Resolutions on issues the business community feels the need for urgent government action to be submitted to the President for consideration. The President also delivers a keynote speech at the conclusion of each PBC.

Malacañang’s reluctance to support the proposed bill reducing the corporate and the individual income tax rates was based on the objection from the Department of Finance(DOF).

The finance department earlier said the fiscal authorities were open to the proposed reduction in income tax rates. However, the agency said this should be done through a “holistic” approach.

PCCI President Alfredo M. Yao told reporters that lowering the income tax rates will empower both individual tax payers and corporations to spend thereby creating more economic activities that are taxable.

With higher income, Yao said, consumption will also grow and companies will have more capital to expand to meet higher demand.

“The projected 35-billion government revenue loss from the tax reduction is not a big amount. Its impact is only short term as more taxes are collected from higher consumption,” he said.

Yao further explained that on top of the regular 32 percent corporate income tax (CIT), corporations are also paying other taxes on their products. There are moves to raise taxes on soda or softdrinks and mining industry.

Most of all, reducing the income tax rates will send a positive signal to foreign investors. “Foreign investors will be encouraged to come because they become more profitable,” said Yao.

Phillippine-based companies also become competitive with companies operating in other ASEAN countries. For instance, he said, Indonesia’s corporate income tax will go down to 18 percent next year from 25 percent but the Philippines’s regular CIT is at a high at 32 percent.

On the individual income tax, the PCCI also supports a review of the income brackets to allow for lower tax payments to Filipino taxpayers.

The PCCI is supporting the bill sponsored by Senator Sonny Angara to reduce income tax rates, but PCCI Honorary Chairman Donald Dee warned that if Malacañang will exercise its veto power once the bill is passed by Congress it will send a bad signal to investors.

The 41ST PBC also urged the Department of the Interior and Local Government (DILG) to review and amend the Local Government Code to amend the scope of taxing powers of provincial, municipal and city governments. The conference also urged the Bureau of Internal Revenue (BIR) to reduce the cost of compliance with tax rules and regulations.

The business community has also asked the government to pass a number of legislative measures stressing that regulatory reforms are at the core of the investment climate and private sector development reforms. These legislative bills include Customs Modernization and Tariffs Act, creation of the Department of Information and Communication Technology (DICT) Act, Public-Private Partnership Act (BOT Law amendment), Electricity Rate Reduction Act (removing the VAT on electricity), Tax Incentives Management and Transparency Act, Income Tax Reform Act, Plastic Bag Regulation Act, and House Bill 3161 (allowing the use of incinerators in burning municipal, biomedical, and hazardous wastes).

On energy, the PBC would like the Department of Energy (DOE) and the Energy Regulatory Commission (ERC) to ensure a price-competitive, reliable and continuous power supply creating in retaining and attracting investments through comprehensive consultations on the Competitive Selection Process and promote initiatives to accelerate the development of upstream energy resources such oil and gas to reduce dependence on imported oil.

To address solid waste management, the PBC has passed a resolution urging for a review in the implementation of the Ecological Solid Waste Management Act and for the Department of Education (DepEd) to mandate the inclusion of reuse, reduce, and recover principle in the school curriculum.

The PBC has also urged for government to come up with the strategic plan to come up with water conservation initiatives. Investments in water, energy, solid waste facilities must be granted incentives.

To support globalization of trade and manufacturing investments, the government should accelerate implementation of the automation and modernization program of the Bureau of Customs (BOC).

The PBC has also urged the Philippine Ports Authority (PPA) to shift cargo traffic from the Ports of Manila to the ports of Subic and Batangas. The Department of Public Works (DPWH) and Highways and the PPP Center have been urged to accelerate infrastructure projects.

On taxation, the PBC has urged the government to adopt a comprehensive tax reform to align existing tax structure with that of ASEAN.

Other resolutions include calls for more budget allocation for the Food and Drug Authority, review of the Magna Carta for MSMEs and the Barangay Micro Business Enterprises.