11 Aug 2016
PHILIPPINES: Competing Legislation Aims to Cut Corporate Income Tax to 25%
A staged drop to a 25% rate of corporate income tax (CIT) over the next three years or the immediate adoption of the figure are the two choices currently being considered by the House of Representatives. The options are outlined in three competing bills, although two of them both favour the same incremental approach.
Moves to lower the CIT rate have been driven by concerns that the Philippines’ present CIT level of 30% is the highest in the ASEAN bloc, inevitably reducing the country’s appeal as a an FDI destination. A decision over the preferred reduction mechanism is expected in September 2016, when the country’s Finance Department is expected to table its own proposals on tax reform.
The mooted CIT changes follow earlier proposals to increase personal income tax allowances as a means of reducing the burden on the lowest-paid earners. For further details, see PHILIPPINES: Income Tax Liability Set to be Cut in Bid to Support Low Earners.