AmCham warns CITIRA may lead to 700K job losses

Table courtesy of the American Chamber of Commerce of the Philippines

The American Chamber of Commerce of the Philippines (AmCham) on Thursday warned that the passage of second package of the government's tax reform agenda will result in hundreds of thousands of job losses for Filipinos.

Around 700,000 jobs will be lost, especially for those employed by industries that currently have fiscal incentives in place, if the proposed Corporate Income Tax and Incentive Rationalization Act (CITIRA) will be enacted, AmCham said in a statement.

“The Philippines is at risk of losing about 700,000 jobs if CITIRA bill will be passed,” AmCham senior advisor John Forbes said.

The CITIRA or the second package of the government’s tax reform initiative aims to gradually slash the corporate income tax to 20% in 2029 from 30% and rationalize fiscal incentives into a single omnibus incentive code.

The House of Representatives has approved CITIRA on third and final reading on Sept. 13.

The Department of Finance is arguing the government is losing about P441 billion in forgone revenues because of the tax incentives, with companies under the Philippine Economic Zone Authority (PEZA) accounting for P345 billion.

PEZA, on the other hand, said it has brought in at least P3.7 trillion worth of investments from 1995 to 2016, aside from generating around 1.5 million direct employment and 7.5 million indirect employment.

It is fighting to keep the incentives in light of the Duterte administration’s initiative to rationalize fiscal perks. —Ted Cordero/VDS, GMA News