NEWSFLASH

---

TAX ON BONUSES NIXED BY FOREIGN TRADERS

Manila, Oct. 14, 1997 - Foreign Chambers of Commerce have expressed opposition to provisions of the proposed new Tax Reform law, which they claim would tremendously increase the cost of doing business in the Philippines. They oppose the 30% tax to be imposed on employers for fringe benefits they would give to their employees.

The group is composed of the American Chamber of Commerce, the Australia-New Zealand Chamber of Commerce, the Canadian Chamber of Commerce and the European Chamber of Commerce.

The chambers explained that the proposed Comprehensive Tax Reform Program (CTRP) will have a great impact on Filipino managerial and supervisory personnel who mostly belong to the middle class.

"Since the tax is to be paid by he employer, they will be less generous in giving fringe benefits which are designed to boost the morale and reward the productivity of the staff," the chambers' position paper stated.

The group also opposes the proposed minimum corporate income tax of 1% of the cot of the net assets, to be imposed by the fourth year of business operations.

---