MANILA, Feb 1 (Reuters) - A joint Philippine congressional
panel approved on Monday a bill that will reduce the rate of
corporate income tax in a bid to attract more foreign investment
and help the coronavirus-hit Southeast Asian economy recover.
The bill, a key priority of President Rodrigo Duterte's
administration, will lower corporate income tax rate to 25% for
big firms and 20% for small enterprises from 30%, the highest in
Southeast Asia, by 2029.
Congressman Joey Salceda, chairman of the bicameral
committee, said the reconciliation of the upper house and lower
house versions of the bill will remove investor uncertainty over
the country's fiscal regime.
"(It) will be like opening the floodgates to investment,"
Salceda said in a statement.
The bill will also streamline incentives to investors to
plug leakages worth over 300 billion pesos ($6.24
billion)resulting from tax holidays and other perks given to
investors perpetually.
Salceda said the tax reform measure will create 1.8 million
jobs over the next ten years, and result in some 931 billion
pesos in tax savings for businesses.
The bill, Salceda said, will also allow duty-free
importation of COVID-19 vaccines, which are expected to arrive
this month.
Despite being one of Asia's fastest-growing economies before
the pandemic, the Philippines lags regional peers in attracting
foreign direct investment because of foreign ownership
restrictions, high power costs and poor infrastructure.
Some lawmakers, including Duterte's allies, have proposed
changes in the economic provisions of the Philippine
constitution to liberalise investment rules.
($1 = 48.0600 Philippine pesos)