Lufthansa Technik not keen on relocating from PHL

Lufthansa Technik Philippines Inc. (LTP) is keen on continuing to do business in the Philippines despite the Duterte administration’s tax reform program, which might strip fiscal incentives for most industries.

“We are not planning to relocate and we … trust … the process,” LTP president and CEO Elmar Lutter told reporters in a media briefing after a groundbreaking ceremony for the company’s new hangar in Pasay City on Wednesday.

The Corporate Income Tax and Incentives Rationalization Act (CITIRA) bill aims to gradually slash corporate income tax from 30% to 20% by 2029 and rationalize fiscal incentives by amending or repealing 123 laws on tax perks and coming up with a consolidated omnibus incentive code.

The proposed second package of the administration’s comprehensive tax reform program has been met with opposition by the business community on the premised that CITIRA might reduce the country's attractiveness to foreign investors and eventually lead to thousands of job losses.

Despite the uncertainties surrounding fiscal incentives, Lutter said LTP is trusts  “that the Philippines and the elected lawmakers see the benefits of this industry.”

The MRO services firm has reached out to the government on all channels it could, he said.

“We officially handed in our position, flagged our concerns about the tax bills, and that’s part of the democratic process,” Lutter said.

“Our hope is that, our concerns are properly integrated in the final consideration. Our main concern is the treatment of parts, which we bring in here,” he said, noting that MRO companies are not properly represented in the CITIRA bill.

“But we are not looking to relocate because we trust the process,” Lutter said.

“The company strongly believes in the ability of the Philippines to be a hub for aviation services in the region, and proof of this is our expansion and commitment to the country,” he said.

Established in 2000, the joint venture has an equity structure of 51% Lufthansa Technik and 49% MacroAsia. —VDS, GMA News