THE chief of the Philippine Economic Zone Authority (PEZA) on Friday denied Trade Secretary Ramon Lopez’s accusation that she was sensationalizing House Bill 4157, or the “Corporate Income Tax and Incentives Rationalization Act” (Citira).
In a statement, PEZA Director General Charito Plaza said she was just expressing the concerns of various industries over the proposed second package of the government’s Comprehensive Tax Reform Program, whose testimonies “speak louder.”
Different business groups have urged lawmakers to maintain the incentives currently enjoyed by mostly foreign companies, which Citira proposes to rationalize. They warned that their rationalization would affect the ease of doing business in the country.
The bill — which passed on third reading at the House of Representatives on Friday — also aims to gradually lower corporate income tax to 20 percent from 30 percent.
“[I] am a government official, and PEZA is a government agency. The government is owned by our people, so I must speak up if there are policies that may affect our peoples’ good and welfare and President Duterte’s gains and dreams for our people and country.” Plaza said.
According to her, while regional neighbors like Vietnam, Thailand and Cambodia have been benefiting from the transfer of investments aimed at avoiding being hit by the ongoing US-China trade war, the Philippines was not.
“We should learn from Vietnam and China’s economics of common sense in attracting big investments,” Plaza said, adding that the former was an obvious “winner” in the trade row.
“We are not sensationalizing [the measure], but [only] expressing our concerns, as PEZA is the biggest export-income contributor-agency directly affected once export-oriented industries will not consider the Philippines anymore and existing industries will leave us,” she added.
“[Trade] Secretary Lopez, unfortunately, as chairman of [the] PEZA Board, [neither] expressed in the Cabinet at the onset of the discussions [on Citira] about PEZA’s performance nor explained that PEZA’s tax incentives are not perpetual and not given to companies per se, but to every product, technology and expansion, because they serve to encourage companies to upgrade their products, bring in new technologies and expand their operations.”
“It is the reason…PEZA and industry associations are reacting because no one else in the cabinet is speaking for us, not even [Lopez].”
Plaza warned that Citira may affect the country’s economy and investment promotion program, and create more worries for export-oriented industries.