18 Jan 2018
PHILIPPINES: FDI Incentives Set to Be Curtailed in Bid to Bankroll Corporate Tax Cuts
The country’s corporate income tax (CIT) rate may be subject to a two-step reduction process under a proposal currently being considered by the Philippine government. If formally adopted, this would see CIT cut to 28% in 2019 from currently 30%, before falling to a permanent rate of 25% in 2021.
In order to make up for the consequent shortfall in tax revenue, the Department of Finance is planning to introduce a cut-off date for a number of the country’s FDI incentive schemes, many of which are currently of no specific duration. To ensure consistency, all of the incentive schemes offered independently by a range of government bodies, including the Board of Investments and the Philippine Economic Zone Authority, will now be subject to final approval by the Fiscal Incentives Review Board.
Plans for the proposed changes were submitted to the country’s parliament on 15 January and are likely to form part of phase two of the national Comprehensive Tax Reform Programme.
For details of phase one, please see: PHILIPPINES: Personal Tax Allowances Increased in 2018 alongside New Product Levies.