The highly volatile exchange rate and the current tax framework are the two biggest concerns that deter German companies from doing more business in the Philippines, according to a report.
A study conducted by AHK World Business Outlook among the members of the German-Philippine Chamber of Commerce Inc. showed that the implementation of the Tax Reform for Acceleration and Inclusion law coupled by other factors contributed to the high inflation of 6.7 percent in the fourth quarter of 2018.
“Inflation is one aspect that influences the exchange rate,” said German-Philippine Chamber executive director Martin Henkelman.
He said while countermeasures like raising interest rates and the implementation of rice tarrification helped ease the pressure on the economy, the proposed Tax Reform for Attracting Better and High-quality Opportunities bill “is likely to be one of the factors contributing to economic-slowdown.”
The group welcomed the reduction of the corporate income tax but was cool to the overhauling of tax incentives granted to companies operating in economic zones.