Tax bills may take backseat amid coronavirus spread

By Charmaine A. Tadalan
Reporter

THE remaining packages of President Rodrigo R. Duterte’s comprehensive tax reform program (CTRP) might take a backseat in the Senate as the chamber gets sidetracked by measures seeking to shield the economy from a novel coronavirus outbreak, its leaders said.

“If the situation worsens, we won’t be acting on it,” Senate President Vicente C. Sotto III said in Filipino during a briefing at the weekend. He added that lawmakers might have to prioritize measures needed to contain a coronavirus disease 2019 (COVID-19) outbreak.

The ways and means committee last month endorsed for Senate plenary debates the proposed Corporate Income Tax and Incentives Reform Act (CITIRA), which will gradually cut the tax on companies to 20% by 2029 from 30% now.

Senator Pia S. Cayetano, who heads the committee, had said there’s a “very good chance” the Senate would approve the bill on final reading by March 13, before Congress goes on a Holy Week break.

A proposed Passive Income and Financial Intermediary Taxation Act (PIFITA) that will simplify the tax structure for financial instruments is pending at the committee level.

Mr. Sotto said the Senate could only pass legislation that could lessen the impact of COVID-19 on the Philippine economy.

“That’s very possible,” Senate President Pro Tempore Ralph G. Recto said in a mobile phone message on Sunday when asked about Mr. Sotto’s view.

Philippine Economic Zone Authority (PEZA) Director General Charito B. Plaza on Sunday asked legislators to halt deliberations on CITIRA.

“We at PEZA and the affected thousands of export industries appeal to our lawmakers to put a halt on the discussion of the proposed CITIRA bill with the continuous surge and spread of the (COVID-19) that plagued around the world,” Ms. Plaza said in a statement on Sunday.

She noted many export industries have already been hurt by the slowdown in China as the virus disrupted global supply chains.

“Travel bans of many countries, likewise, affected airlines and the quarantine requirements in shipments added in the slowdown of export-import activities. Worst, another consequence is that jobs had to be reduced too by companies,” Ms. Plaza said.

‘ECONOMIC VACCINE’
But Albay Rep. Jose Ma. Clemente S. Salceda argued that CITIRA is one such measure that would cushion the impact of a deadly virus outbreak.

“CITIRA is the economic vaccine for COVID-19,” Mr. Salceda, who heads the House ways and means committee, said in a text message. “Delaying CITIRA will be worse than the worst economic impact of COVID 19.”

“Corporate income tax reduction will be the biggest economic stimulus to offset a weakness in demand while resolving the uncertainties surrounding the incentives regime will restart both domestic and foreign direct investments,” the congressman said

“At this point, CITIRA is positioned as a first best policy (prescription) to cure any possible economic ills of COVID-19,” he added.

The House of Representatives has approved on final reading both the proposed CITIRA and PIFITA.

The measures form part of the Duterte administration’s comprehensive tax reform program, which includes proposals to simplify the tax structure for financial instruments, provide a uniform framework for real property valuation and increase state share in mining revenue.

The government has enacted a measure cutting personal income taxes and increasing or adding levies on several goods and services.

Another law grants estate tax amnesty and amnesty on delinquent accounts, while two more laws separately increased the excise tax on alcohol products and conventional and electronic cigarettes.

Ms. Cayetano earlier said the Senate could pass CITIRA by March 13 if it discusses the measure regularly. The 18^th Congress has two weeks left before it goes on its March 14-May 3 break.