CEBU businessmen are encouraging the government to focus on the country’s competitiveness as Congress continues to deliberate on the second package of the Tax Reform for Acceleration and Inclusion (TRAIN) law.
Antonio Chiu, Cebu Chamber of Commerce and Industry (CCCI) president, emphasized this during the Investment Board Meeting at the Capitol on Wednesday, as the TRAIN 2, which has renamed as the Tax Reform for Attracting Better and High-quality Opportunities (TRABAHO) bill, would probably attract lesser investors to the country due to perception that the new investors promised incentives would be taken away.
“We should not lose focus on our competitiveness,” said Chiu.
Aside from the rationalization of incentives, Chiu also encouraged the government to lessen the corporate income tax further to 20 percent, five percent lower than the planned 25 percent.
Chiu also said to do it at once and not lessen it by 1 percent a year which would be too long a process.
He said that a sudden drop of the corporate income tax to 20 percent would greatly attract investors to pour their investments into Cebu.
“If you impose it (Corporate Income Tax) at 20 percent, for sure most businessmen would pay,” he said.
He also said that the sudden drop of corporate income tax would potentially boost the number of exports which had decreased while imports had increased.
John Arffy Ceniza, Philippine Economic Zone Authority (PEZA) information officer, who was also present during the Investment Board meeting, said that they were having a hard time advertising their incentives due to the question of whether these would be still be given or not.
Ceniza said that they were, however, very concerned about the employment opportunities that could be given by those who would invest in the Philippines.
“Ang amo ra gyung concern is the employment side. The investment that ma-generate nato, kung mahitabo na (TRAIN 2), ma-lessen gyud, and kung malessen ang investment, ma-lessen gyud ang employment opportunities (Our concern is on the employment side. The employment opportunities would lessen if the investments would also lessen),” said Ceniza.
CCCI Past President Melanie Ng, who was also attended the meeting, also raised her concern about the possibility of several Business Process Outsourcing companies (BPOs) closing shop.
She said unlike the manufacturing sector which had more equipment for their facilities, the BPOs could easily just move to areas with a favorable business environment.
“It’s very easy for a BPO company to move from Cebu to India,” said Ng.
She suggested to Gov. Hilario Davide III, who was also at the Investment Board meeting, for the Capitol to provide incentives to these BPO companies if the province could.