Economy

Bicameral committee may be hard-pressed to meet deadline for key tax bill

THE bicameral session on a key tax reform bill continues to be subject to negotiations by the delegations sent by both chambers of Congress, with a key legislator suggesting that both chambers may be hard-pressed to meet a self-imposed January deadline for approving it.

Representative Jose María Clemente S. Salceda said in a message to BusinessWorld Sunday that “We are trying” to meet the target of January approval, but added that both chambers are still laying down their positions on the measure’s final form.

“The Speaker (Lord Allan Jay Q. Velasco) has instructed me as Chairman (of the ways and means committee) to send the House positions to the Senate on a secretariat to secretariat conference,” Representative Jose María Clemente S. Salceda said in a message to BusinessWorld Sunday.

He did not elaborate, but such a conference may suggest both sides are still haggling on the measure’s fine details. The House has been pressing for a version of the proposed Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act that contains more incentives for investment in the countryside.

CREATE, which has been repositioned as an economic stimulus bill after previous incarnations that only called for an overhaul of the corporate tax and incentives regimes, contains provisions that reduce taxes retroactively to the second half of 2020. Any delays in passage would give companies little time to prepare their taxes under the new rate structure by the April tax filing deadline.

CREATE seeks to lower corporate income tax to 25% immediately from 30%.

The measure was formerly called the Tax Reform for Attracting Better and Higher Quality Opportunities bill in 2018 and then Corporate Income Tax and Incentives Rationalization Act (CITIRA) after several revisions. It was repositioned as a relief measure for businesses after the pandemic.

The House of Representatives listed the passage of the CREATE bill as a priority measure when the Congressional session resumed on Jan. 18.

“We are working very hard because CREATE is far different from CITIRA,” he added. CITIRA was certified as urgent by President Rodrigo R. Duterte in March. — Gillian M. Cortez

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