MANILA — The European Chamber of Commerce of the Philippines (ECCP) is urging the government to accelerate moves in adjusting the tax system in the country in order to be more competitive in the region.
ECCP president Michael Raeuber stated Thursday that the country’s outdated tax system has been the highest in Southeast Asia which can lessen its competitiveness to attract foreign direct investments (FDIs).
Raeuber said the government needs to hasten reforms as companies are now exiting China and looking at other investment destinations in neighboring countries.
To take advantage of the opportunities, the Philippines should offer a competitive business environment, particularly easing doing of business and a tax regime that can compete with other ASEAN member-countries, the ECCP president said.
“We have to bring the Philippines forward. The government now has limited time to approve economic legislation and institute reforms,” he noted.
“The ECCP has been encouraging European businesses to invest in the Philippines. We are also working closely with Philippine exporters not just to Europe but to other countries. There is a need to see some action,” he added.
The ECCP said it is pushing for the adjustment of tax system in the country through Marikina Representative Romero S. Quimbo who is the chair of Ways and Means Committee in the House of Representatives.
According to Quimbo, the country’s tax bracket rates have not been adjusted since 1997 with 86 percent of income taxes being shouldered by only 16 percent of the population.
“The cost of doing business in the Philippines is higher than in competing countries in the region. With ASEAN integration starting soon, it makes good economic sense to completely overhaul our corporate and individual income taxes in order to be competitive,” he said.
Meanwhile, the ECCP reiterated that having a competitive business environment that will attract more FDIs will help the country to generate more jobs and achieve inclusive growth.