The Department of Trade and Industry may generate as much as P40 billion in additional government revenues from economic locators if a longer transition of 10 years and a preferential tax rate of 8 percent of gross income earned annually are allowed.
Trade Secretary Ramon Lopez said the department was constantly seeking measures to help the Philippine Economic Zone Authority keep its locators, who might transfer operations once the incentive regime became less attractive.
“Either through transition or higher GIE could be way out, it can generate more revenue. The bottom line is that it has to be revenue neutral. To me, the bigger part is the 30 percent to 20 percent reduction in CIT (corporate income tax). It has to be revenue neutral in the sense that there has to be at least an extra revenue either saved or gained in the move. Making it time bound will have the impact in the longer term,” he said Monday at the sidelines of a forum held at the Philippine International Convention Center.