By Joann Villanueva/PNA
CLARK, Pampanga — Investment pledges in the Philippine Economic Zone Authority (PEZA) may be down today but Finance Secretary Carlos Dominguez III said this is largely due to investors asking for perks from government.
In his speech during the consultation event with the private sector and other stakeholders dubbed “Sulong Pilipinas” here Monday, Dominguez said foreign direct investments (FDIs) in the first eight months of the year rose 31 percent year-on-year to USD5.7 billion.
“That may be true but the investments are actually up. Now the ones in PEZA are down because those are the investors that have asked for subsidies. Investments from foreign companies that do not ask for subsidies are actually up by 31 percent,” he said.
PEZA, in a statement, earlier said investment pledges as of end-September this year declined by around 55 percent year-on-year from PHP196.46 billion to PHP87.85 billion as they await developments on the proposed cut in corporate income tax (CIT).
Under the proposed CIT reform measure, the Department of Finance (DOF) is suggesting the removal of unnecessary incentives to companies that are already stable, after noting that many large and profitable companies still enjoy tax perks to the detriment of the small companies, as well as the government.
PEZA authorities and some stakeholders are calling for the revision of the proposed CIT reform, saying that some proposed changes will make the country less attractive to investors.
They also said that some foreign investors are likely to transfer their operations to other countries because of this tax reform measure.
However, Finance officials have said that the past governments have given out incentives that should have instead been used for government programs.
The DOF said that in 2015 alone, the government extended some PHP86.3 billion worth of income tax incentives to firms that paid a total of PHP141.8 billion in combined dividends to their shareholders.
