MANILA - The government should "tread carefully" in passing the second tranche of tax reforms at this time as investors and companies are reeling from the effects of the coronavirus crisis, some senators said Tuesday.
It may be the "wrong time" to pass the Corporate Income Tax and Incentives Reform Act (CITIRA), a revenue-neutral bill that will strip incentives from some sectors, senators said in separate statements, hours after Finance Secretary Carlos Dominguez called on Congress to pass the tax measure.
"Ang problema kasi at this point in time, parang wala naman sa tono. Hirap na hirap na 'yung mga korporasyon at mga Pilipino, biglang tatambakan at pipigain ng buwis," Senate Committee on Economic Affairs chair Imee Marcos said in a televised interview on state-run channel PTV.
(The problem at this point in time is it seems out of tune. Corporations and Filipinos are having a very hard time, and then they will suddenly be burdened with taxes.)
"'Wag natin asahan na ito (CITIRA) ay mas makakapagbigay ng tax at maraming koleksyon kasi hirap talaga lahat... 'Wag natin masyado ipitin ang ating mga korporasyon dahil lahat naghihikahos," she said.
(Let's not expect CITIRA to generate taxes and collections because everybody is having a hard time... Let's not squeeze taxes from corporations because everybody is in crisis.)
Sen. Grace Poe, in a separate statement said, agreed that now is not a good time to pass a tax measure.
"With CITIRA, we are taking out the benefits, incentives, exemptions. It will be hard for us to catch those investments... Baka sa ngayon, medyo wrong timing lang ito (Right now, this is the wrong time to tackle this)," Poe told reporters in an online press briefing.
While discussing the CITIRA during the coronavirus crisis may "settle uncertainty," the government needs to be careful "not to lose" investors during the health crisis, Senate Finance Committee chair Sonny Angara told reporters in a text message.
"We need to tread carefully given the drastically different economic environment. First rule is probably to not lose any of the present investors we already have since the investment outlook doesn’t look fantastic going forward," Angara said.
"We should study what our neighbors are doing as we will inevitably be compared to them, whether we like it or not," he said
Sen. Francis "Kiko" Pangilinan said the government "should look to borrowings" instead of imposing taxes to help fund the government's programs to keep the economy afloat during the coronavirus crisis.
"While we understand the need to raise money to fund our economic recovery efforts, I am wary of imposing more taxes on businesses already on the verge of bankruptcy and closure," Pangilinan said in a statement.
"Perhaps the economic team should look to borrowings rather than taxes to help fund the economic recovery efforts," he said.
Congress earlier passed the Bayanihan to Heal as One Act authorizing the government to realign funds to provide cash aid to at least 18 million poor families and other sectors crippled by coronavirus-related work stoppages.
The financial assistance program was expected to help spur economic activity during the health crisis, but as of the first week of May, less than half of beneficiaries have received the promised cash allowance.
Government recently announced 5 million more poor families will receive the aid.
For the first time since 1998, the Philippine economy shrank in the first quarter of 2020 after the government imposed a 2-month lockdown on the capital region and nearby areas to contain the spread of the coronavirus disease 2019 (COVID-19).
A modified lockdown will take effect in Metro Manila, Laguna province and Cebu City, where coronavirus cases continue to be reported, from May 16 until the end of the month.
Senate Committee on Ways and Means chair Pia Cayetano earlier said the Senate's version of the CITIRA would be amended to suit the country's needs during the coronavirus crisis.
President Rodrigo Duterte earlier certified the bill as urgent, but the measure is still pending in Senate as senators have yet to finish amending the bill.