The Financial Executives Institute of the Philippines (Finex) said that Congress should prioritize bills that could alleviate the Philippine economy currently in slump, amid the virus pandemic.
“We believe at this time; as we struggle to recover from the Covid-19 quarantines that the most urgent and important task we would ask of Congress is to pass the laws that will help business to recover, and attract the attention of new investors so we can put the 2 million or so unemployed Filipinos back into a job,” the business group said.
Their statement comes after government data reveals the economy contracted by 0.2 percent in the first quarter, the first time since 1998. According to the Philippine Statistics Authority (PSA), at least 5 million Filipinos lost their jobs due to the imposed lockdown in several parts of the country in April. This translates to 17.7-percent surge in unemployment year-on-year.
The business group is urging lawmakers to pass “right away” the Corporate Recovery and Tax Incentives for Enterprises Act (Create).
“The most important bill to pass immediately is Create to allow the tax relief to be converted into salaries and business recovery, and then followed by other necessary economic stimulus measures,” Finex said.
The Create bill seeks to cut corporate income tax (CIT) rate by five percent to 25 percent beginning July. The CIT will then be reduced by 1 percentage point every year from 2023 to 2027.
Finex National Affairs Committee Chairman Eduardo H. Yap described the bill as “historic economic reform, one of the largest and most game changing in decades.”
Bringing down the CIT to 25 percent will immediately draw the Philippines nearer to the 23 percent average in the Association of Southeast Asian Nations (Asean) region, Yap said, noting that this could then boost investor confidence.
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