Connect with us

Hi, what are you looking for?

Economy

SEIPI asks lawmakers to reconsider FIRB cap

Semiconductor and Electronics Industries in the Philippines, Inc. (SEIPI) expects to see 7% growth this year, as global demand recovers. — REUTERS

By Jenina P. Ibañez, Reporter

AN ELECTRONICS exporters industry group is asking lawmakers to reconsider the potential cap on investments reviewed by investment promotions agencies (IPA).

Under Senate Bill 1357 or the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act, IPAs like the Philippine Economic Zone Authority will review investment projects valued at P1 billion or lower, while the Fiscal Incentives Review Board (FIRB) approves larger projects.

Semiconductor and Electronics Industries in the Philippines, Inc. (SEIPI) President Danilo C. Lachica said that the industry group is hoping for a higher threshold for quicker approval processes under the IPAs.

“We will send our inputs to the House of Representatives. Many investments are over the P1-billion cap. Majority will be at or below P5 billion,” he said in a mobile message on Monday.

The Bicameral Conference Committee is set to be convened to reconcile clashing provisions in the bills passed by the House and Senate. The Senate passed its version in November 2020, while the House approved its version in 2019.

The Senate version would reduce corporate income tax to 25% from 30% starting July 2020, and then by one percentage point each year from 2023 to 2027. The rate falls to 20% for local smaller companies with net taxable income of P5 million or lower and total assets less than P100 million.

It would also strengthen the capacity of the FIRB to oversee the grant of incentives by IPAs.

“Historically, expansions and new investments have been around $100 million or roughly about P5 billion, so we’re hoping to approach that number so that you can have more efficient and quick approval,” Mr. Lachica said in an interview with ANC on Monday.

He added that he “would like to understand further” the timeline and criteria for renewal applications for existing projects.

“How long will it take and is the FIRB properly equipped to address those in an expeditious manner?”

Policy think tank Action for Economic Reforms last year said that increasing the threshold would weaken tax reform by removing investments from scrutiny, adding that the Bicameral Conference Committee could not legally insert the proposed amendment.

House Committee on Ways and Means and Albay Rep. Chairman Jose Maria Clemente S. Salceda, the principal author of the House version, in a phone interview said that the SEIPI recommendation “will be on the table.”

Naka-pitong pre-bicam na kami (We have had seven pre-bicam meetings) and it’s too long, it’s too complicated but definitely it will get attention,” he said.

The industry group expects 7% growth for 2021 with more global demand for industrial, consumer, mobility, and medical electronics, after a projected 5% decline for 2020.

Meanwhile, the Philippine Stock Exchange, Inc. (PSE) and the Philippine Dealing System Holdings Corp. (PDSHC) in a joint statement asked for the immediate enactment of CREATE, which they said would make the country’s tax rates more competitive in the Association of Southeast Asian Nations (ASEAN) region.

They added that the reduction in corporate income tax will benefit the Philippine economy as it leaves more funds for publicly listed companies to expand business or distribute to stockholders.

“The investment of said tax savings in other business undertakings or investment vehicles can set off a chain of positive economic consequences such as employment generation, higher spending, and increased domestic business activity,” the PSE and PDSHC said.

Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Get the daily email that makes reading the news actually enjoyable. Stay informed and entertained, for free.
Your information is secure and your privacy is protected. By opting in you agree to receive emails from us. Remember that you can opt-out any time, we hate spam too!

Latest

Investing

People living in rural areas are having to travel further to find somewhere to withdraw and deposit cash free of charge, says the City...

Investing

Ministers have ruled out extending the list of workers who are exempt from self-isolation rules and warned that the August 16 date for lifting...

Economy

The House of Representatives will adopt the Senate’s version of the proposed measure taxing Philippine Offshore Gaming Operators (POGO), a key lawmaker said on...

Economy

President Rodrigo R. Duterte on Friday approved the recommendation of his pandemic task force to enforce stricter quarantine rules in Manila, the capital, and...

Economy

Thirty-seven percent of Filipinos are optimistic that their lives will improve over the next 12 months, a non-commissioned survey shows.  Of the 1,200 respondents in Social Weather Stations’...

Economy

Six electricity consumers on Friday filed a complaint with the Ombudsman against Department of Energy (DoE) Secretary Alfonso G. Cusi, alleging that the government official has neglected his duties.  “In his five...

You May Also Like

Investing

Having a good Instagram marketing agency to back up your Instagram account is an absolute must going into the new year. With competition stronger...

Economy

US President Joseph R. Biden, Jr., will rely on ally countries to supply the bulk of the metals needed to build electric vehicles and focus on...

Investing

As a traditionally rigid insurance industry becomes bogged down by antiquated processes and operations, a handful of industry leaders are seeking to shake things...

Economy

THE Securities and Exchange Commission (SEC) has warned the public from investing or to stop any investment in a group named Maxxprofit Computer Trading...

Disclaimer: SmartRetirementReport.com, its managers, its employees, and assigns (collectively "The Company") do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

Copyright © 2021 SmartRetirementReport. All Rights Reserved.

Get the daily email that makes reading the news actually enjoyable. Stay informed and entertained, for free.



Your information is secure and your privacy is protected. By opting in you agree to receive emails from us. Remember that you can opt-out any time, we hate spam too!