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Philippines: Electronics industry eyes 10% corporate tax – Seipi
THE Semiconductor and Electronics Industries in the Philippines Foundation Inc. (Seipi) is seeking for the sector a corporate income tax (CIT) lower than that proposed under the second package of the government’s Comprehensive Tax Reform Program.
In a press conference during the Philippine Semiconductor and Electronics Convention and Exhibition (PSECE) 2018 at SMX Convention Center in Pasay City on Wednesday, Seipi President Danilo C. Lachica said the industry would ask the government to “consider that, instead of a 15-percent CIT, it should be 10 percent, inclusive of all local business taxes and real property tax.”
Under Package Two, the government will remove the perpetual 5-percent tax on gross income earned (GIE) being enjoyed by companies inside economic zones.
“We support the tax reform program, because we know the government has to find [funds]for [its]‘Build Build Build’ [infrastructure program]. So we asked [Seipi] members what they can live with, and after [some]pencil-pushing, we came up with the 10 percent,” Lachica said.
“The 10 percent [has]an impact on operating costs. It differs from company to company, and I can’t tell the exact amount, but it’s a cost that our member-companies are willing to live with, because we understand our role as corporate citizens to pay for the use of infrastructure,” he added.
The industry would also ask the government to define what “new technology” means, the Seipi chief said.
“[I]ncentives would be given to new products, but the question is: How do you define a new product?” Lachica said, adding that they were “working with the government” in defining that.
“In our industry, it has to be faster, cheaper, and [of]better quality. If you have those performance paramerters well-defined, that, in itself, qualifies as a new product,” he said.
“The Department of Finance (DoF) has been very receptive [to it], and they know that we fully support the whole program, but we just want to make sure that we don’t disincentivize our member-companies [that]poured a lot of foreign direct investments and [jobs]into our country,” he added.
The sector is a leading driver of Philippine exports. Recent Seipi data showed that revenues from electronic exports increased by 5.4 percent to $8.69 billion (P456.4 billion) in the first quarter of 2018 from $8.24 billion (P432.76 billion) a year ago.
Kosei Koba, president and CEO of Ibiden Philippines Inc., said that, while parent companies are encouraged to invest here, it would be difficult to do this if the country’s policies are not competitive.
Many foreign companies are willing to invest with the current set of incentives, he pointed out.
“When we [make]new investments in the country, we need to have appropriate incentives on the ground to persuade [the]parent company to [invest more]here,” Koba said.
“We understand the government’s [reason]to [implement]tax reform, but…I would like them to consider the foreign investments coming in,” he added.
Source: http://www.manilatimes.net/electronics-industry-eyes-10-corporate-tax-seipi/407942/