Transcript of interview with Senator Pia S. Cayetano
Chair, Senate Ways and Means Committee

Topic: PIFITA, CITIRA

Question: This is just an initial hearing but what are the committee's thoughts on several salient points?

Sen. Cayetano: Basically, these are the recommendations of DOF, and I'm an administration senator, so my job is to try to support the DOF position as much as possible. But we have an open mind on everything that they are presenting. Given that this is intended to be a revenue-neutral measure, it's not intended to take away income, revenues per se, from our constituents, our sectors. Even our colleagues say it should be a fairly easy bill to pass. I hope.

Question: On the proposal of Senator Drilon on the abolition of several non-performing GOCCs.

Sen. Cayetano: That's no longer the scope of this committee, but I have said to the extent that we can gather information through this committee and it can be used not just to confirm their passive incomes but also what subsidies they are receiving, [then] we could transmit those data to our colleagues so proper steps would be taken. It's so difficult on my part na ang trabaho ko is to raise taxes, and may leakages tayo, 'di ba? So, syempre, open ako diyan so we can maximize our limited funds.

Question: What is the status of CITIRA in the Senate?

Sen. Cayetano: We have been going over this. It's quite complex because there's a lot. Not just the Internal Revenue Code, but also a lot of other laws are affected because there are charters of the different IPAs [Investment Promotion Agencies]. So we had to go through that, and we have continuous discussions with the other sectors. We now have a piece of draft legislation that I can defend, taken into consideration the concern of many sectors. I hope nakikinig kayo: I hope you will be happy with the committee report that we will come up with because it will already be the product addressing many of your concerns.

Question: We will cut to 20 percent, is that still on the higher end?

Sen. Cayetano: For the information of everyone, CITIRA is corporate income tax. [For the first part,] we will bring down from 30 percent to 20 percent our corporate income tax over a span of ten years. And then the other part is the rationalization of fiscal incentives, which over the decades were given to different sectors and industries. So, bina-balance 'yun dahil bababa ang income habang bumababa ang corporate income tax, at the same time, nira-rationalize natin 'yung incentives na pinamimigay natin because why would we give incentives to an industry that is either non-performing or not giving benefits to the public? So, DOF has the task to balance that. Inasmuch as I want to bring corporate income tax down faster and with bigger amounts, we also have to recognize that the government is in Build, Build, Build mode, so it has a lot of expenses. For now, I am supporting that version of the DOF.

Question: Regarding CITIRA, the sectors are asking about the rates being set with PIFITA before CITIRA.

Sen. Cayetano: Don't worry. CITIRA is the priority. I think it is important for the sectors involved that the Senate Committee on Ways and Means is cognizant of this bill, and we want to push it forward, but with CITIRA, the sectors, a lot of businessmen, I believe, will have peace of mind as Secretary Dominguez has been assuring them of. We will set standards in very clear terms so that there is no room for second guessing what will be the future in two years, three years, five years. No guessing games. We will indicate very clearly what the incentives are and we will streamline the granting of incentives with FIRB (Fiscal Incentives Review Board).

Question: What is the status of the committee report?

Sen. Cayetano: We are in the very final stage of proofreading. The commas, the periods, and the erasures. We are working on that over this week, and I hope to sponsor it next week.

Question: What is the difference with previous forms?

Sen. Cayetano: Basically, the flow will be the same, except that there are clearer parameters. There are clearer numbers, so that the industries can make their computations. They can know what their futures would be like, which is what I have gathered in the many talks I have with them. There will be sunset provisions on a particular date, and the new dates are very clearly identified, so they know what they deal with. That is what I want. A vibrant economy that is predictable for our investors.

Question: What will be the timetable because DOF has also set a timetable to pass the measure?

Sen. Cayetano: Ginawa nga akong sprinter. By nature, I'm a marathoner. So, if you recall the interviews, kaya ko 'yan, 15 to 18 months. Bigla na lang naging three months. So, ngayon, imbes na nagmamarathon ako, nag-high intensity training na ako. Nagshift ang mind ko sa mabilisan, but it's true. That's my analogy. Pero okay lang. All packages, ako kaya ko siyang i-sponsor. But as you can see, it's not my sole decision. PIFITA, it appears that there will be very little resistance. We will list all the concerns of the sectors, but as far as the senators are concerned, wala masyadong issue 'yun. CITIRA there are also a lot of sectors, but what I'm hoping is that when the different sectors see the final committee report, they'll be happy. Because it is predictable, it is fair, para maka-move forward na tayo.