Philippine Electronics Industry Association opposes the Tax Reform Package, citing its Adverse Impact on the Investment Climate


The Philippine government has been working on reforming the tax system for more than 20 years.  Legislators are now tackling the second package of the “TRABAHO” Bill.


In the ASEAN region, the Philippines has the highest income tax (at over 30%).  The Bill aims to lower this gradually to 20%.  This bill will also cut tax breaks (rationalize incentives) for PEZA-registered companies, many of whom are Japanese firms.  There are over 3.558 PEZA-registered firms as of 2018, with US$ 4.221 billion in investments, contributing 16.2% of the country’s GDP.


The tax reform has affected investment decisions valued at US$ 1 billion, losing investments over to Vietnam, Thailand and China.  Dan Lachica, President of the Philippine Semiconductor and Electronics Industries in the Philippines Foundation, Inc. (SEIPI), cited an example of increasing the tax rate of 5% (based on Gross Income Earned or GIE) to 7% and retaining PEZA’s autonomy.


The Philippine government is securing resources to fund a national infrastructure improvement plan that has begun.

English Translation by SEIPI/Jaja Gaid]

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