German investors are holding off regarding their commitments in the Philippines until they get clarification on the proposed tax reform law. German-Philippine Chamber of Commerce executive director Martin Henkelmann said German investors find it difficult to make a final decision on moving forward because they are not sure how the tax reform law will be implemented and how it will affect investments.
The Corporate Income Tax and Incentives Rationalization Act (CITIRA), which seeks to lower corporate income tax rates and rationalize fiscal incentives, is expected to be discussed further in the Senate this week. It will lower corporate income tax from 30% to 20% in ten years.
Henkelmann said investors know that the corporate income tax will be reduced but still face uncertainty over the final form of the incentive regime and the timeline for implementation.