March 02, 2020
AER lambasts PEZA attempt to halt CITIRA deliberations
Action for Economic Reforms (AER) lambasted Philippine Economic Zone Authority (PEZA) Director General Charito Plaza for asking legislators to stop the deliberations on the CITIRA (Corporate Income Tax and Incentives Reform Act) bill. The said bill had been passed by the House of Representatives, and currently awaits approval by the Senate.
“For Ms. Plaza to continue calling for the bill’s stoppage at this late stage and critical point is a most reckless, most irresponsible act. She is an economic saboteur,” AER coordinator Filomeno Sta. Ana III said.
“The main reason behind the lacklustre investment performance last year was the investor uncertainty created by the needless delay in the deliberations on CITIRA. Investors just want to know what the final rules are, and they will immediately make investment decisions,” Sta. Ana added.
“CITIRA is expected to stimulate both domestic and foreign direct investments because it will make fiscal incentives more responsive to current challenges, will provide a wider menu of incentives, will create an enabling environment for good governance, and will significantly reduce corporate income tax that will benefit the overwhelming majority of corporations. Ms. Plaza’s statements and actions will sabotage these benefits,” AER Industrial Policy coordinator Jenina Joy Chavez said.
AER asserted that Ms. Plaza is guilty not only of gross irresponsibility and insubordination for going against CITIRA but also of gross incompetence. Data show PEZA generated only PhP 117.541 billion worth of new investments last year, reflecting a 16.19 percent decline in committed new projects from PhP 140.242 billion registered in 2018. AER observes that the PEZA performance in the past few years under Plaza’s administration has been dismal, with PEZA investments even declining despite an over-all increase in investments (save for last year, precisely caused by the uncertainty associated with the delay in CITIRA).
For these reasons, AER called for the firing of Ms. Plaza.
AER also appealed to Senate President Vicente Sotto III not to entertain any ideas that will stall CITIRA and other pending bills on tax reform like the one on passive income and financial intermediary taxes in response to a statement of the Senate President that the tax reforms may have to take a back seat as the Senate has to give priority to the issue of the coronavirus outbreak.
AER said there is no conflict between passing tax reforms and putting in place measures to address the outbreak, for they are tackled independently and simultaneously. Further, CITIRA is already on the cusp of approval.
AER said there is no better moment than now to have the CITIRA passed. The momentum is there, and the narrow window to let the inflow of foreign direct investments is open as investors flee China that is besieged by the trade war with the US and the coronavirus epidemic. (END)