Lawmakers fast tracking approval of trade reforms
November 10, 2014 at 10:35
By Czeriza Valencia (The Philippine Star) | Updated October 29, 2014 – 12:00am
MANILA, Philippines – Businessmen yesterday received assurance from lawmakers of progress on the deliberations on the proposed competition policy as well as reforms on the present taxation system.
During a general membership meeting of the Makati Business Club (MBC) yesterday, group chairman Ramon del Rosario urged the government to provide a clear direction on two key economic reforms within the last remaining months of the present administration.
“Time is running out for the administration if we are about to institute reforms,” said Del Rosario.
With the proposed Competition Act, Del Rosario said the government should lay down the rules on what business activities are considered anti-competition as well as the sanctions that would imposed on offenses to such policy.
The business community likewise seeks clarity on the direction of the proposed changes to the tax system.
Sen. Paolo “Bam” Aquino said the Senate is expected to pass the Fair Competition Act of 2014 that consolidates several bills for the leveling of the playing field for businesses.
Business groups have been pushing for the passage of the Competition law saying it would enable the country to attract more investments and enable existing companies to expand their operations, resulting to the creation of more jobs.
Fair competition is also seen to introduce more and better products and services for consumers.
Aquino noted that a competition policy would enable the Philippines to take advantage of various trade agreements – such as the ASEAN economic integration, Regional Comprehensive Economic Partnership (RCEP) and the Trans-Pacific Partnership (TPP) – all of which require anti-trust laws.
The Philippines is the only ASEAN member state without a competition policy.
Marikina Rep. Romero “Miro” Quimbo, chairman of the House Committee on Ways and Means, meanwhile, said that Congress is fast-tracking deliberations on a comprehensive tax reform bill that would ease the tax burden on workers.
Quimbo is at the forefront of the so-called Tax Reforms for Inclusive Growth (TRIGR) bill which seeks to lower individual tax rates, as well as corporate income tax while simplifying the tax structure and broadening the tax base through increased compliance.
His bill proposes a flat rate of 25-percent income tax for self-employed individuals and professionals, as opposed to the prevailing 32 percent. The bill also proposed a reduction in corporate income tax rate from 30 percent to 25 percent and increases the minimum corporate income tax from two to five percent.
Quimbo said that along with introducing reforms to the tax system, his committee would also look into complaints arising from a revenue memorandum circular (RMC) issued by the Bureau of Internal Revenue (BIR) covering rules for filing tax refunds.
Foreign investors have been complaining that the government is making it harder for them to refund advance value-added tax (VAT) payments for importation of goods used in the manufacture of products for export.
The RMC, which applies to all pending claims for VAT refunds, stipulates that the BIR would take 120 days to decide on the grant or denial of an application. If no action is taken by the BIR within the 120-day period, it would be deemed a denial of the application.
In case of full or partial denial of the claim for tax refund, the RMC stated that the affected taxpayer could file an appeal in two ways: file the petition with the Court of Tax Appeals within 30 days from the receipt of BIR decision or file the claim within 30 days from the expiration of the 120-day period, if no action is taken by the BIR.
As an incentive to investors, firms could claim refunds from the government for the advanced VAT payments made for imports of items used for goods they export.
The Japanese Chamber of Commerce and Industry of the Philippines Inc. (JCCIPI) wants the BIR to withdraw the circular. The European Chamber of Commerce of the Philippines (ECCP) has also criticized the government for imposing the regulation
“There have been many complaints about this revenue memorandum circular and so we want to sit down with the BIR and see and have some accountability on this,” said Quimbo.
Source: https://www.philstar.com/business/2014/10/29/1385491/lawmakers-fast-tracking-approval-trade-reforms
