Several European businesses are putting their expansion plans in the Philippines on hold, while waiting for further guidance on the proposed second package of the government’s tax reform program.
According to the European Chamber of Commerce of the Philippines (ECCP), a number of its members are now wary of that the tax incentives they now enjoy will be taken away once the proposed tax reform measure is enacted.
“Without revealing a name, there are EU investors who are in the market here already, but who are a little bit worried what’s going to happen next, what’s the effect on us if we invest further,” ECCP executive director Florian Gottein said.
Gottein declined to elaborate, but noted there are less than 10 businesses that decided to put their expansion plans on hold.
“That’s why there were decisions made that in the meanwhile, at least, put it on hold or look at other markets in the region to further invest there,” he said.
Businessmen are anxious of the possible removal of tax incentives that attracted foreign investors to do business in the country.
“You offered us here, we came here, and now in the middle of the ball game you want to change the rules,” he said.
Because of the mid-term elections this May, Gottein said it is unlikely that Congress would pass the TRABAHO bill.
“Why we are a little bit cautious is we don’t think the TRABAHO bill will be passed in this Congress. We will see this whole position for most of the European investors maybe until the end of the year,” he said.
The proposed measure also seeks to lower corporate income tax rates, which the ECCP supports.
“This is a very encouraging move and we are supporting this. Our recommendation would be to accelerate the reduction of the CIT to boost our economy,” said ECCP president Nabil Francis. —VDS, GMA News