The Philippine Government must guarantee much-needed tax incentives for investors who are willing to risk capital in revival efforts if it wants to revive the domestic apparel industry, it, according to the Foreign Buyers Association of the Philippines (FOBAP), which said revival efforts will only succeed if existing tax perks are retained.
Such perks include the 5-per cent tax on gross income paid by economic zone firms in lieu of all local and national taxes.
Incentives will be overhauled under the proposed Tax Reform for Attracting Better and High-Quality Opportunities bill, also known as the Trabaho bill, FOBAP president Robert M Young said.
The Trabaho bill will gradually reduce corporate income tax to 20 per cent in 2029 from 30 per cent now and rationalize incentives. The measure is awaiting the approval of senators, who are currently on a break for the mid-term polls in May.
The country’s garments industry will benefit if the government grant subsidies for power and labour, a report in a business daily in the country quoted FOBAP director Ding Buendia as saying.
He said a couple of Chinese firms are now looking into setting up factories here, while some are planning to partner with Philippine companies.
The government has to revitalize the garments industry if it wants to trim the country’s trade gap and penetrate more markets, particularly in its Southeast Asian neighbourhood, Young added. (DS)
Fibre2Fashion News Desk – India