In an interview, Finance Undersecretary Antonette Tionko said concerned agencies, including the DOF, DTI and the Philippine Economic Zone Authority (PEZA) are set to review and revise some provisions in the proposed reforms to the Philippines’ tax incentive system.
DOF FB Page/File
DOF firm on 5-year CITIRA transition
Mary Grace Padin (The Philippine Star) - October 17, 2019 - 12:00am

MANILA, Philippines — The Department of Finance (DOF) stands firm on a five-year transition period for the proposed Corporate Income Tax and Incentives Rationalization Act (CITIRA) despite the Department of Trade and Industry’s call for a longer transition. 

In an interview, Finance Undersecretary Antonette Tionko said concerned agencies, including the DOF, DTI and the Philippine Economic Zone Authority (PEZA) are set to review and revise some provisions in the proposed reforms to the Philippines’ tax incentive system.

“Yes, we will work on refinements, because as it is, there’s still stuff that needs to be improved,” Tionko told reporters.

Tionko said one of the provisions up for discussion is the transition period, which the DTI is proposing to extend longer than five years.

However, when asked if the DOF would be amenable to this proposal, Tionko and Finance Secretary Carlos Dominguez said the DOF was firm on a five-year transition period. 

“I told them our position is five years. Because that’s what’s in the bill,” Tionko said.

CITIRA contains Package 2 of the government’s Comprehensive Tax Reform Program. It seeks to lower the corporate income tax rate from 30 percent to 20 percent, while rationalizing fiscal incentives to make them more performance-based, time-bound, targeted and transparent.

The measure proposes for a sunset provision for existing incentives, which is a maximum of five years.

However, Trade Secretary Ramon Lopez earlier said the DTI would push for a longer transition period to cushion the bill’s impact and provide a softer landing for existing investors.

Meanwhile, PEZA director general Charito Plaza, who had been vocal in opposing CITIRA, last week caved in, resulting in the unanimous decision by the PEZA board to support the CITIRA bill.

Plaza said she has decided to back the bill as other agencies have expressed openness to fine-tune some of its features.

With PEZA’s support, Tionko expressed confidence that CITIRA is now one step closer to being passed in Congress.

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