THE business community welcomed President Rodrigo Duterte’s promise on Monday to lower both corporate and personal income tax and relax the bank secrecy law.
Delivering his first State of the Nation Address before the joint session of Congress, the President who assumed office 25 days ago said, “We will lower personal and corporate income tax and relax bank secrecy.”
The president of the European Chamber of Commerce of the Philippines (ECCP), Henry Schumacher welcomed the initiative, saying that lowering corporate income tax “is badly needed.”
Describing the tax rate in the Philippines as “ uncompetitive” relative to other countries in the Asean region, Schumacher said the President’s initiative was “great news.”
Another foreign business executive, the president of the Canadian Chamber of Commerce of the Philippines, Julian Payne, also welcomed Duterte’s move to reduce corporate tax.
“The Canadian Chamber of Commerce welcomes the intent to reduce corporate income tax. We are confident this initiative, along with other measures, will encourage increased domestic and foreign investment which in turn will increase the tax base and total corporate tax revenue even with a lower rate,” Payne said.
According to the executive director of the Makati Business Club, Peter Perfecto, President Duterte’s speech was “very comprehensive” and detailed “a clear vision for the next few years.”
The President, said Perfecto, “set a strong tone from the top,” particularly emphasizing that abuse of authority will not be tolerated while taking a strong stance against criminality and drugs.
“We welcome the inclusion in the SONA of priorities critical to doing business and furthering the country’s competitiveness, including significant reduction in red tape, tax reform, massive infrastructure investments, and improvement of current macroeconomic policies,” he said.
Perfecto also spoke of Duterte’s commitment to dialogue and partnership and noted the inclusion in his speech of the recommendations from the Sulong Pilipinas consultations in his policy address. “We hope that this process continues and that it will be expanded to include civil society and other cause-oriented groups,” he said.
The essential ingredients to economic progress – peace and order – were also present in the speech, Perfecto said, referring to Duterte’s declaration of a unilateral ceasefire with the communist rebels. He described the President’s call to correct historical injustices as a very bold move, saying it sends “a strong signal that the government is serious about ensuring permanent and lasting peace.”
“Significantly, he was able to effectively show that he cares for improving the people’s welfare, whether in the small aspects of eliminating long lines, extending the validity of licenses and passports, and opening communication outlets for Muslims and indigenous peoples,” he said.
“We look forward to the implementation of his vision, and MBC stands ready to contribute to this task of nation-building,” Perfecto added.
Long-awaited income tax cut
The Tax Management Association of the Philippines (TMAP) said it was pleased to hear the President statement about the lower income taxes. This, said TMAP president, Benedict Tugonon, was “what tax payers have been waiting for a very long time.”
Lowering personal and corporate income taxes, said Cid Terosa, the University of Asia and the Pacific economist, was a strong move to stimulate more business and investment activities.
“Consumption activities can be spurred further. The easing of the bank secrecy law will encourage greater transparency and discourage illicit financial activities,” he added.