Senate panel tackles bill to reduce corporate income tax rate

The Senate ways and means committee on Wednesday began deliberations on a bill that seeks to reduce tax imposed on companies doing business in the Philippines.

Senator Juan Edgardo Angara, who chairs the panel, said the Philippines needs to lower its 30-percent corporate income tax to prepare for the economic integration of the Association of Southeast Asian Nations (ASEAN) next year.

"Retaining the high corporate tax regime will create practical problems like massive transfer pricing issues that will translate into revenue losses," he said in a statement on Wednesday.

Angara authored Senate Bill 2163, which seeks to gradually decrease the country's corporate income tax rate in three years, with a reduction of two percent every year.

The senator said passing the bill will change the Philippines' image as a "less attractive investment destination" in the ASEAN region.

The Philippines currently has the highest corporate income tax rate among ASEAN countries, he said.

Angara admitted that the cuts detailed in the bill could cost the government some P7 billion in revenue losses, but added that the country could also easily rebound from the foreseen decrease.

“The offset will come in the form of making the Philippines an attractive investment haven which in turn would widen the tax base, increase economic activities, and create tax-paying employment," he said.

The proposal to lower corporate income taxes in the country needs to undergo committee and plenary deliberations and voting before it can be approved by the Senate. — Andreo Calonzo/BM, GMA News