Senate to pass CITIRA for business recovery
Senate President Vicente Sotto III said the CITIRA will help corporations as well as micro, small and medium enterprises (MSMEs) recover from the slump. CITIRA aims to lower the corporate income tax (CIT) and improve the incentives system for businesses.
Boy Santos
Senate to pass CITIRA for business recovery
Paolo Romero (The Philippine Star) - May 4, 2020 - 12:00am

MANILA, Philippines —  The Senate is likely to pass the proposed Corporate Income Tax and Incentives Rationalization Act (CITIRA) to help companies get back on their feet, and help jumpstart the economy  that has been battered by the coronavirus disease 2019 (COVID-19) crisis, senators said yesterday.

Senate President Vicente Sotto III said the CITIRA will help corporations as well as micro, small and medium enterprises (MSMEs) recover from the slump. CITIRA aims to lower the corporate income tax (CIT) and improve the incentives system for businesses.

“This will also have some benefits to the government, which will be able to collect revenues from sectors that were not taxed before,” Sotto told dzBB.

He however stressed he would push for amendments to make sure that the bill—pushed by the Department of Finance—will not lead to loss of jobs or burden consumers.

Under the bill, the country’s CIT rate will be gradually lowered by one percent every year, from 30 percent to 20 percent by 2030. The measure will also rationalize fiscal incentives given to firms to make these “performance-based, time-bound, targeted, and transparent.”

The bill intends to prioritize incentives to business activities that generate domestic employment; promote research, development and innovation; promote agribusiness; and invest in areas that are less developed or are recovering from disasters and conflicts, among others.

CITIRA shall likewise offer additional tax deductions to reward corporations’ good behavior, such as local job creation, exports, and investment in high technology.

Sen. Imee Marcos also seeks amendments that would help businesses get on their feet, not burden them with taxes, saying export-oriented firms and business process outsourcing companies must benefit from the measure as the country has the highest CIT in the region.

She cautioned, though, against removing too many incentives that would discourage investors from coming into the country as the global economy is expected to slow down due to the crisis.

Meanwhile, an expert said yesterday that restrictions imposed on certain cities in the National Capital Region (NCR) that have relatively lower COVID-19 cases should be eased to avert irreversible adverse effects on the national economy.

Kaycee Crisostomo, a minerals trader and who analyzes trends for a living, pointed out that the country risks losing a huge chunk of gross domestic product (GDP), if it does not lift restrictions under the enhanced community quarantine in some “off-center” cities in Metro Manila ahead of May 15 when the ECQ is expected to be lifted or modified.

He said 70 percent of the country’s GDP comes from NCR, Calabarzon and Central Luzon.

“A second look on the coverage of the extended ECQ is necessary and vital. It has to be further evaluated based on each city’s management of the pandemic. The quarantine in some cities will simply need to be lifted ahead of the others to avert irreversible adverse effects on the national supply chain, specifically, and the economy in general,” Crisostomo said.

Many sectors from NCR have expressed concern on the imposition of the extended ECQ on all cities therein, believing it will take its toll on the already restless underprivileged sector.

“Furthermore, its negative impact on the country’s economic base, not to mention food security, is inevitable,” he added.

Crisostomo explained that cities in the NCR have varying “attack rates (AR)” and “case fatality rates (CFR)” based on government data. As of May 1, northern cities like Caloocan only have an AR of 12 cases for every 100,000 people despite having the third highest population in Metro Manila.

Valenzuela and Navotas both have an AR of 12, while the middle of the northern cluster is Malabon with the lowest AR in Metro Manila at 11.

Such cities should not be included in the same group of cities with case rates that are up to almost 16 times higher, he said.

Cities in the south, like Las Piñas, Taguig and Muntinlupa, evidently also show lower case statistics with AR ranging from 28 to 29. Marikina in the east has an AR of 26. Las Piñas and Muntinlupa are gateways to Southern Luzon and Marikina is a gateway to the east.

Cities located in the south record some of the lowest CFR in NCR, i.e. Taguig, Las Piñas and Muntinlupa with five, six, and eight percent, respectively.

These figures are only a fraction of that for northern cities with a high of 16 percent. Further, these cities also have low-medium AR, which just means that together with the relatively lower AR, the COVID-19 survival rates here are some of the best in NCR, he said.

“In fact, Taguig and Las Piñas have the best showing in containing the virus having the lowest CFR vis-à-vis a comparatively lower AR than the rest of NCR. Other cities with low CFRs include Valenzuela, Makati and Pasay,” Crisostomo said.

Data show that cities located in the central part of NCR experience the highest concentration of COVID-19 cases like San Juan, which has the highest AR in Metro Manila at 176, Mandaluyong with 92, Makati with 67 and Parañaque with 59.

The following cities have rather lower ARs than the four mentioned: Quezon City with 39, Pasig with 36, Pasay with 41, Pateros with 31 and Manila with 34.

Despite fairly lower ARs among these nine central cities, he said Quezon City and Manila, with 1,242 and 657 infections, respectively, have the highest number of confirmed cases in NCR.

He said these central cities with the highest number of cases comprise over 60 percent of the total confirmed cases in NCR or 3,839 in absolute terms, based on the Department of Health’s COVID-19 data.

“One of the factors that may have contributed to such numbers is unhampered mobility due to the geographic locations of these cities. Major business hubs like the Makati CBD and Ortigas Center, which are located at the joint boundaries of Pasig, Mandaluyong and Quezon City, rely on the free ingress and egress of employees from other Metro Manila cities working in companies located therein,” Crisostomo added.

Owing to its population, land mass and number of cases, Quezon City experienced the highest number of deaths at 97 among Metro Manila cities and also has the highest number of hospital admissions, he said.

Crisostomo however said that given the statistics, NCR should not be allowed to be on a standstill as it should be considered that “off-center” cities can and should play the role in jumpstarting the economy.

It is in the “off-center” cities where major critical enterprises and manufacturing facilities are located. In addition, these off-center cities have access to major highways and provincial markets. As cases in point, Navotas and Malabon are the fishing capital of NCR, which is vital to sustain food supply in NCR and major parts of Luzon; Valenzuela is a manufacturing hub; and Caloocan is the gateway to the north and home to businesses and warehouses, he said.

Among the off-center cities in southern Metro Manila where easing of restrictions should be considered are Las Piñas, Muntinlupa and Taguig, he said.

“A different set of considerations like the ability to safely produce and mobilize essential goods and services for these cities should also be studied and examined in the relaxation of quarantine or possible gradual lifting in the days and weeks to come,” Crisostomo said.

CIT COVID-19 VICENTE SOTTO III
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