Tax incentives eyed for firms maintaining workforce

MANILA – The government is studying to provide tax incentives to companies that would maintain the number of their workforce amid the coronavirus disease 2019 (Covid-19) pandemic and community quarantine measures, Trade Secretary Ramon Lopez said on Tuesday.

“We’re trying to consider for companies that they do not reduce workforce could be given an additional year of tax holiday or tax incentive as a way to incentivize them not to remove workers. This has been considered now,” Lopez said during the joint webinar of European business groups.

He added that the government is pursuing policies, including legislation, which would improve businesses and the investment climate despite the pandemic.

These bills include the Corporate Recovery and Tax Incentives for Enterprises (CREATE) bill that will reduce corporate income tax to 25 percent from 30 percent; Retail Trade Act to liberalize the retail sector; and the Public Service Act that eases foreign restrictions in some service industries.

Moreover, Lopez expressed hope that the unemployment and underemployment figures in June improved from the 17.7 percent unemployment rate and 18.9 percent underemployment rate in April.

“We hope to see, since we started to reopen latter part of May, we are hoping that the June number would show a slightly better number than 17.7 (percent),” he said.

The Philippine Statistics Authority reported that 7.3 million Filipinos were unemployed in April as the government placed Metro Manila and the island of Luzon under enhanced community quarantine (ECQ), the most stringent community quarantine measure, in mid-March.

The government started to ease lockdown measures in May.

However, Metro Manila, Bulacan, Cavite, Laguna, and Rizal reverted to modified ECQ until August 18.These areas have the most number of enterprises in the country and employ a significant number of Filipinos.

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