Fintech Alliance.PH Urges Enactment of Corporate Tax Incentives Bill

The Fintech Alliance.PH together with 43 other private business groups in the Philippines have expressed support for the Corporate Recovery and Tax Incentives for Enterprises (CREATE) bill and are pushing for its quick enactment into law.

The groups urged the congress to prioritise the bill and enact it within the month of January 2021.

The joint statement reiterated that “every day of delay comes at the risk of losing more jobs and hemorrhaging more investments”.

The bill passed in both houses of congress in November 2020 intends to boost businesses to market confidence by providing relief to those enterprises that are suffering from setbacks due to the COVID-19 pandemic.

Once enacted, the law will provide immediate reduction of the corporate income tax (CIT) rate from 30% down to 20% for small and medium enterprises with net taxable income not more than PHP 5 million and from 30% to 25% for other corporations retroactively effective on July 1, 2020.

These could bring the country’s CIT rate closer to the ASEAN average of 21.65% and give the companies more resources to retain their employees and cope with financial difficulties. The CIT reduction could also potentially attract investments into the Philippines market.

“We are hopeful the proposal would give flexible authority to the Fiscal Incentives Review Board (FIRB) and the president in granting both fiscal and non-fiscal incentives making it an agile mechanism that can seize high-value investment opportunities”,

said Lito Villanueva, Fintech Alliance.PH chairman and RCBC Executive Vice President and Chief Innovation and Inclusion Officer.

“We thank congress for including proper safeguards against potential abuse of discretion or making it a political tool to grant favors to undeserving recipients. The fintech industry is committed to working with all stakeholders in swiftly rebuilding our economy amidst this pandemic”,

Fintech Alliance.PH is an industry trade organisation comprising more than 50 companies in the digital finance space and its membership is said to generate over 90% of digital financial transactions in the Philippines today.

Featured image credit: Edited from Pixabay