Stand-alone bill cutting corporate income tax by 5% urgent amid pandemic —Marcos

A bill seeking to reduce corporate income tax to 25% from the current 30% must be passed by Congress before session adjourns on the first week on June, Senator Imee Marcos said on Monday.

In a statement, the chair of the Senate committee on economic affairs said the measure should be a separate one from the Corporate Recovery and Tax Incentives for Enterprises Act (CREATE) proposed by the administration's economic managers,  which is a recalibrated version of the corporate tax reform bill.

"The problematic incentives can be worked out later in another law. We are all ready to work overtime to pass CREATE, but besides the reduction in corporate income tax and the extension of so-called sunset provisions for business incentives, where is the bill?" Marcos said.

The senator reiterated that lower corporate income tax rates would help the country attract investors amid the pandemic as she claimed that Vietnam, Thailand, and Indonesia use such a magnet.

"We must get some investment from that precious China fall-out, as well as the anticipated new outsourcing from a depressed world economy," she said.

Marcos pointed out that the Philippines lost more than P1 billion in export volumes in the past two months because of better tax regimes in its neighboring countries.

Duterte's economic team earlier bared that it is preparing three bills that would help the country rebound as part of the recovery stage from the COVID-19 crisis starting June until December 2020.

One of these is the CREATE bill which is a modified version of Senate Bill No. 1357 or the proposed Corporate Income Tax and Incentives Reform Act (CITIRA).

"The Senate has CITIRA already, so they can just revise that so as not to start from zero," Socioeconomic Planning Acting Secretary Karl Kendrick Chua said.

CITIRA is currently on second reading in the Senate. 

CREATE bill seeks to reduce corporate income tax to 25% "across the board," meaning for all businesses, immediately starting July.

Under this tweaked version of the corporate tax reform bill, there will be no changes in the current fiscal incentives being enjoyed by existing investors for the next four to nine years to help them cope with the COVID-19 situation. —LDF, GMA News